Australia has one of the biggest investing home biases when compared to other countries. According to a recent report by Vanguard (using December 2014 figures), 66.5% of our assets are invested domestically. Whereas 59% of Canada’s assets are invested domestically and 26.3% of the UK’s assets are invested domestically.

This hasn’t necessarily been a bad thing as Australia’s economy has grown for 25 consecutive years. Our share market has delivered some of the best returns in the world – an average of 9.5% over the last 30 years to June 2016 (source: Fidelity). That’s not even including those great franking credits.

However, as Australia’s stock market is only 2% of the overall global market, more investors are now looking overseas for growth and diversification.

Some of this overseas investing has resulted in passive index investing becoming more popular. However the Godfather of index investing, Vanguard’s founder Jack Bogle, has predicted that index investing may only return a paltry 2% after costs annually for the next decade. Active managers may soon come into fashion again.

How can you profit from this trend? Step forward Magellan Financial Group Ltd (ASX: MFG) and Platinum Asset Management Limited (ASX: PTM)

Platinum is a fund manager with a market capitalisation of $3 billion and $23.4 billion in funds under management at the end of September 2016. It’s one of the most well-known fund managers to focus on overseas investments.

Platinum’s shares are trading at the same price as they were in May 2013, it currently has a grossed up dividend yield of 9.23% and is trading at 15x FY16’s earnings.

Magellan has a market capitalisation of $3.5 billion. Magellan has been a star performer for shareholders and investors alike. Its shares have grown 572% in four years and it could keep growing well as its reputation for good returns continues.

Trading at 19x FY16’s earnings with a grossed up dividend yield of 5.8%, Magellan may be a little more expensive than Platinum, but I think the performance justifies this price.

If you want access to Magellan’s management there’s also the listed investment company that Magellan manages – Magellan Flagship Fund Limited (ASX: MFF).

Foolish takeaway

It’s always a good idea for Foolish investors to monitor which direction Australians are investing. The current Australian trend is increasing diversification with investments overseas, so fund managers could be beneficiaries of this trend. Foolish investors could ride the tailwinds by investing in the above stocks.

Out of the two fund managers, Magellan shares would be my pick. Success tends to breed success, attracting more funds into its stable.

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Motley Fool contributor Tristan Harrison doesn’t own shares in any companies mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.