Top countries and brokers Aussies use to invest in global markets

Despite continued economic uncertainty, the ASX 200 performed well in FY23/24, ending the year up almost 8% (or more than 12% inclusive of dividends), and since then has continued to reach new highs. While many economies around the world were impacted by inflation, tightening financial conditions and geopolitical tensions, savvy Australian investors continued to hedge their bets and diversify into global markets, rather than relying solely on ASX investments to produce returns.

Based on data from Sharesight’s userbase, this blog delves into the most popular global markets for Australian investors and some of the reasons why these markets were in such high demand during FY23/24. We also reveal the top brokers for international trades and some of the features that make these brokers so sought-after by Australian investors looking to diversify their portfolios.

Most popular countries for Australian investors

As you might expect, Australian investors strongly prefer investing in the local market, with the US being their second choice.

Markets most popular with Australian investors, based on Sharesight’s userbase

Once we remove Australia and the US from the dataset and zoom in to look at the remaining international markets, we can see that the UK, Canada, Hong Kong, broader Europe, Germany and New Zealand are also popular choices for Australian investors.

Markets most popular with Australian investors, excluding Australia and the US

Why Australians are investing in overseas markets

While the ASX performed well in FY23/24, it represents only 2% of the global equities market – leading savvy investors to look to overseas markets to diversify their portfolios. For Australian and global investors alike, markets such as the New York Stock Exchange (NYSE), London Stock Exchange (LSE), Hong Kong Stock Exchange (HKEX) and Nasdaq are typically popular choices as they provide investors with access to some of the world’s highest-valued companies, including a diverse range of industries and sectors.

Looking at the charts above, we can also observe a correlation between the most popular international markets and Australian expat numbers. For example, as seen in the latest ABS data, the UK, China and New Zealand are all part of the top 20 most common countries for expats to Australia. Another potential explaining factor for investors’ preferred markets includes the tendency for investors to invest in markets where they understand the language.

Most popular stocks for international trades

Diving deeper into the data, we can see that Australian investors’ most popular trade of FY23/24 was Tesla (NASDAQ: TSLA). This corresponds to our trading data from that period, which shows that Tesla has consistently been one of investors’ most popular buy and sell trades. This is likely due to the strong performance of Tesla’s share price over the past few years, with opportunistic investors taking advantage of the stock’s steep downward trend during Q2 of the financial year.

Tesla and NVIDIA topped the list of Australian investors’ most-traded international stocks in FY23/24

One notable difference in the results this year is the emergence of NVIDIA (NASDAQ: NVDA) in the rankings. With the rapid rise of AI and the emergence of NVIDIA as a winning stock in this category, it’s not hard to see why NVIDIA was one of the top choices for Australian investors.

Apple (NASDAQ: AAPL) also remained a popular trade for Australian investors in FY23/24. With the ongoing success of the iPhone and other Apple products, plus the company’s exponential share price growth over the past decade, it’s not hard to see why Apple was one of the top choices for Australian investors.

Most popular Australian brokers for international trades

As can be seen in the chart below, Australian investors’ favourite broker for international trades was CMC Markets, followed by Stake and Pearler.

Why these brokers are a popular choice for international trades

It’s clear why CMC Markets was Australian investors’ favourite broker for international trades, with access to US, UK, Canadian and Japanese markets for $0 brokerage fees.¹ As our data is based on the Sharesight userbase, it should also be noted that CMC’s connection to the Sharesight API enables investors to automatically sync their trades to Sharesight, allowing them to seamlessly track their international trades along with the rest of their investments.

Looking at the data, we can also see that Stake was a popular broker choice among Sharesight’s Australian userbase. This is likely due to its support for US markets with $0 brokerage fees. Investors using Sharesight can also import their historical and ongoing US trades from Stake via spreadsheet file or by automatically forwarding their trade confirmation emails – another convenient way for investors to keep track of their Stake trades.

It is also likely that Pearler was a popular choice due to its support for US stocks, plus Sharesight users’ ability to easily import their trades via Pearler’s API connection with Sharesight.

"Pearler was built with a focus on long-term investing, so many of our investors are buying and holding US investments," says Pearler CEO and co-founder Nick Nicolaides.

"The top five most popular investments on Pearler are all exchange-traded funds – and of these, four hold overseas assets. Among investments in individual shares, the three most popular all belong to US companies.

"Whether it's via ETFs or individual stocks, Pearler investors have an appetite for international markets – and Sharesight's integrations streamline the process more than ever before."

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FURTHER READING

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¹ FX spreads apply.