A lot of Australian portfolios have holdings which are dominated by the big four banks Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ).
Investors may also have investments in Bendigo and Adelaide Bank Ltd (ASX: BEN), Bank of Queensland Limited (ASX: BOQ) and Suncorp Group Ltd (ASX: SUN).
Most portfolios' financial industry exposure is probably from a domestic bank. It might be a wise move to diversify your financial exposure with the following four international options:
Macquarie Group Ltd (ASX: MQG)
Macquarie generates a majority of its earnings from overseas, but it still does have a significant presence in Australia.
The business has diversified its earnings to include less cyclical activities that it describes as "annuity-like", including aircraft leasing.
Macquarie is trading at 13x FY18's estimated earnings with a partially franked dividend yield of 5.34%.
CYBG PLC CDI 1:1 (ASX: CYB)
CYBG used to be part of National Australia Bank, but now it's a separate entity. It is the entity responsible for the Clydesdale Bank and the Yorkshire Bank in the UK.
The UK economy and banking system offers a different set of opportunities and risks to the Australian version. If you believe the UK economy is going to do well over the next few years then this could be the way to gain exposure.
CYBG is trading at 14x FY17's estimated earnings and doesn't yet pay a dividend.
Pepper Group Ltd (ASX: PEP)
Pepper is one of Australia's largest non-bank lenders and financial groups. It has a presence in Australia, Ireland, the UK, Spain, South Korea and China.
It is rapidly expanding its business having gone from $304.3 million total income in 2015 to $413.2 million total income in 2016.
Pepper is currently trading at 14x FY17's estimated earnings with a grossed-up dividend yield of 3.47%. It has a very low dividend payout ratio of 24%.
Magellan Financial Group Ltd (ASX: MFG)
Magellan Financial Group has been the stellar ASX-listed fund manager that focuses on international investments.
It has been very successful at growing funds under management and outperforming the market, which is why its share price has grown by 31% over the past year. It could continue to grow in popularity as investors look overseas for diversification and higher performance.
Magellan Financial Group is currently trading at 25x FY17's estimated earnings with a grossed-up dividend yield of 3.75%.
Foolish takeaway
I think all four of the above businesses are interesting options. At the current prices, I think Magellan Financial Group would be my preferred pick.