Looking Abroad When Investing in Equities

“China’s current market size is nine times larger than Australia and will rise from 1 per cent of weight in global indices to 9 per cent. Tevfik (Credit Suisse) estimates that our share of regional indices will halve from 18 per cent to 9 per cent. In other words, global investors will suck $140 billion, or 10 per cent, of the ASX market capitalisation.” Australian Financial Review – 22nd June 2015.

 Even more reason to look abroad when investing in equities. Providence currently has a higher weighting to International Equities than Australian Equities unhedged which has served portfolios well.

 MSCI World-ex AUS

Pain Report Positive on Global Economic Outlook

If you want some good news have a read of this.

 Jonathan Pain, author of The Pain Report and member of The Providence Investment Committee is very positive on the global economic outlook.

 He believes we are seeing signs of traction between monetary policy and the real economy in both Europe and America. He sees the world firing on all cylinders, a period of secular reflation, although the road maybe bumpy.

 As an early bull on China and Chinese equities he is also excited on the outlook here rather than what is written in the western media. Click here to read the full Pain Report.

 You can also subscribe to his reports if you find them interesting. We certainly do.

Our interpretation is volatility will increase as longer term bond rates rise but global growth will assist corporate profits.