International shares, until not so long ago, were largely left to international investors.
Aussie investors tended to stick almost exclusively with the ASX listed stocks. But that picture has changed drastically.
These days its easier than ever to find up to date information on international shares. And the fees for investing in overseas companies have come way down, even over the past few years.
A look at the top-10 list of most popular traded shares in August among Saxo Capital Markets’ Australian clients reveals that 4 of them are, in fact, international shares.
Four top international traded shares
We start off with Tesla Inc (NASDAQ: TSLA), the seventh most popular traded share overall among Saxo’s clients in August.
Saxo says that Aussie retail investors are drawn by Tesla’s founder Elon Musk as he pushes ahead with innovative next generation vehicles. And Tesla’s potential to expand into the massive Indian market has increased local interest in the company.
According to Saxo, “India is considered one of the world’s fastest emerging car markets and if Tesla can partner with auto parts suppliers within the country, it could make huge inroads.”
The Tesla share price is up 106% over the past 12 months.
Moving on, the fifth most popular overall share and third most popular traded international share for August was Alibaba Group Holding Ltd (NYSE: BABA).
The Chinese e-commerce giant (listed on US and Hong Kong exchanges) has struggled as it’s come under scrutiny from Chinese regulators over intellectual property violations. Alibaba’s share price is down 38% over the past year and down 13% over the past month.
Given the share price falls, Saxo notes:
The retail giant’s price-to-earnings ratio stands currently at 19.25, which is some way short of its 2020 high of 42.85. All these signs would suggest that the Alibaba stock is undervalued and has the potential to rebound, but the uncertain August has seen question marks linger over the corporation’s ability to withstand regulatory reforms.
Which brings us to the fourth most popular overall and second most popular international traded stock, Apple Inc (NASDAQ: AAPL).
Aussie investors are drawn to Apple in part because it’s a globally recognised household name. It’s also been charging higher, with shares up 32% over the past 12 months. And that’s based on solid fundamentals.
As Saxo notes, “Its last quarterly earnings once again surpassed expectations, registering US$81.41 billion in revenue and an impressive profit of $1.30 per share.”
Saxo also offered these words of caution:
In the weeks and months ahead, retail traders should keep a close eye on Apple’s legal headwinds. The operator’s App Store has come under legal scrutiny for failing to provide a “free and fair marketplace” for its app developers, according to Tennessee Senator Blackburn.
And finally, the second most popular overall and most popular traded international share among Saxo’s clients in August was…drum roll please…Amazon.com, Inc. (NASDAQ: AMZN).
If you never bought anything from the e-commerce giant before the pandemic lockdowns, there’s a fair chance you have by now.
A global operator, Amazon has been making rapid inroads Down Under. And that growth looks set to continue.
Saxo notes, “Amazon’s Australian trading arm has been tipped to experience exponential growth in 2021… Its latest AU$500 million centre in Sydney will deliver the latest in robotics and automation, cementing a state-of-the-art logistics hub in the Emerald City.”
The Amazon share price has gained 8% over the last 12 months.
There are loads of great companies trading on the ASX. And it makes sense for most Aussie investors to hold ASX shares in their portfolios.
But that doesn’t mean international shares should be ignored. Investing outside the ASX can help diversify portfolios and offer access to companies you just won’t find listed in Australia.
While there are added risks to consider, like currency fluctuations, it’s worth taking some time to look into the potential opportunities of leading international shares.