It's very normal for investors to focus on equities in their own country, but Australians who only invest in the domestic market could be missing out on emerging themes and sectors internationally. 

Home bias 

According to the report, Australia represents just 1.4% of the global share market. 

However, many local investors allocate a large share of their portfolios to ASX-listed companies. 

This tendency is known as home bias and, while it's understandable, it can also be limiting.

Investing close to home can feel reassuring: familiar brands, known businesses and local news you can follow. But familiarity is not the same as opportunity. Some of the world's major growth themes are playing out in markets, sectors and companies that many Australian portfolios may not fully capture.

Craig also highlighted that being a small share of the global market wouldn't matter as much if Australia was consistently outperforming. 

However, it made 9.4% annualised returns over the past 10 years, which sounds good until you realise that, over that same time period, the US returned 15.5% and Japan 14.5%. 

Major growth themes are global not domestic 

Additionally, it's important to remember that buying equities is buying expected future earnings growth, and by focusing on Australia you could be missing out on some of the major growth themes in investing today. 

While the Australian market might have ridden high on the mining boom and trade links with China in the past, it has limited exposure to some of today's key growth drivers.

Take Artificial Intelligence. The opportunity is not only in US technology companies, but in the infrastructure behind them, including semiconductors, memory, data centres, power generation and electricity networks. Much of that spending flows through global supply chains, including markets like Korea, Japan and Taiwan, while Australia has only limited exposure.

Looking past AI 

While AI is perhaps the most obvious example, it is far from the only growth opportunity sitting outside the Australian market. 

For example, Craig highlights that European countries are spending heavily to secure reliable and sustainable energy supplies. 

At the same time, geopolitical tensions are driving higher defence spending across Europe.

As well as missing out on growth opportunities, investors should be aware the Australian share market is relatively concentrated in financials like major banks, and materials/mining. There is nothing inherently wrong with these sectors or businesses, but a well-constructed portfolio often seeks to diversify its sources of return across industries, economies, business models and growth drivers.

How to target international shares

For investors seeking exposure to international equities, there are numerous ASX ETFs that track other markets. 

For example, the Betashares Capital – Asia Technology Tigers ETF (ASX: ASIA) targets Asian technology companies. 

It has risen more than 60% in the last 12 months. 

Another popular fund is the BetaShares Nasdaq 100 ETF (ASX: NDQ) which targets the largest non-financial companies listed on the Nasdaq market.

For European exposure, there is the BetaShares Europe ETF – Currency Hedged (ASX: HEUR) which provides exposure to Europe's largest companies that generate a substantial portion of their revenues outside the Eurozone.

The post Why it's vital for investors to look to international shares for growth: Expert  appeared first on The Motley Fool Australia.

As recently reported by Bloomberg, eight of the world's 10 best-performing stock markets in 2025 are in Europe. That includes Germany's DAX Index, which has rallied more than 30% in dollar terms. Other top-performing stock markets have been located in Slovenia, Poland, Greece, the Czech Republic, Hungary, Spain, and Austria.

The pan-European Stoxx 600 Index is beating the S&P 500 Index (SP: .INX) by a record 18 percentage points in dollars. According to Bloomberg, this has been driven by Germany's historic fiscal spending plans and a stronger euro. Investors are turning away from US markets amid tariff concerns and fiscal debt, and turning to European markets.

The S&P 500 rebounded in May, but remains well behind several European markets. 

The good news for ASX investors looking to buy European stocks is that there are several European-focused ASX exchange-traded funds (ETFs). Here are two to consider.

Betashares Europe Currency Hedged ETF (ASX: HEUR)

The Betashares Europe Currency Hedged ETF provides exposure to Europe's largest companies that generate a substantial portion of their revenues outside the Eurozone. There are currently 126 companies in this ETF, providing substantial diversification. One advantage of this ETF for ASX investors is that it includes several sectors that are underrepresented on the ASX. For example, 21% of the fund is in the industrials sector. This ETF is also currency hedged, reducing currency risk for ASX investors.

For a management expense of 0.56%, investors own companies from countries that Bloomberg listed as home to the top-performing stock markets for the year to date. As of 30 May, 34% of the investments were located in Germany, 27% in France, 11% in the Netherlands, and 9% in Spain. 

The HEUR ETF is up 12% for the year to date. This significantly outperforms the iShares S&P 500 AUD ETF (ASX: IVV), which is down 4% over the same time frame.

Global X EURO STOXX 50 ETF (ASX: ESTX)

Another option to consider is the Global X EURO STOXX 50 ETF. For a management expense of 0.35%, this ETF provides exposure to 50 of the largest and most liquid companies in the Eurozone. 

As of 30 April, 38% of the investments were listed in France, 29% in Germany, 13% in the Netherlands, and 9% in Spain. 

For the year to date, the ESTX ETF is up 18%, substantially outperforming both the HEUR ETF and the IVV ETF.

The post Why it could be time to buy European-focused ASX ETFs appeared first on The Motley Fool Australia.

That's according to Janus Henderson Group CDI (ASX: JHG)'s latest Global Dividend Index.

Sadly, ASX investors might be scratching their heads right about now. If you're among those who didn't notice a substantial increase in your dividend income during the February reporting season, you're not alone.

ASX dividends slump amid surging global payouts

Australia lagged the world when it came to dividend growth last quarter, with ASX shares offering 6.6% less in the way of passive income on a headline basis – just $27.9 billion.

And Janus Henderson previously warned Aussies such a happening could occur.

This time last year the asset manager pointed to "Australia's high level of dividend concentration", saying it leaves the nation dependent on a handful of companies for dividends. Many of those call the mining sector home.

In its latest release, Janus Henderson commented:

The end of the recent mining boom is seeing payouts in the sector normalise, bringing first-quarter cuts.

BHP Group Ltd (ASX: BHP) was to blame for much of the drop in Aussie payouts. The iron ore giant, and ASX's largest company by market cap, slashed its interim dividend by 40%.

Though, the company was still the second-largest dividend payer in the world last quarter – down from the top spot in the prior period.

Fellow mining giants Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Ltd (ASX: RIO) also cut their recent offerings by 13% and 46% respectively.

How might ASX investors have gotten a slice of growing payouts?

But not all Aussie investors missed out on the global dividend growth. Those boasting geographically diverse portfolios likely benefited.

The 12% lift in dividends around the world last quarter was led by three markets. Emerging markets saw dividends grow 22.5%, Europe (excluding the UK) boasted a whopping 36% of dividend growth, and Japan saw offerings increase 17.7%.

And getting exposure to those regions needn't be difficult. Plenty of ASX exchange-traded funds (ETFs) offer just that.

For instance, an investor keen to get a grip on emerging markets might turn to the Vanguard FTSE Emerging Markets Shares ETF (ASX: VGE).

Another wishing to hold a slice of European markets, without the UK, might find what they're looking for in the Betashares Europe ETF – Currency Hedged (ASX: HEUR).

Finally, ASX ETFs aiming to mirror the performance of the Japanese stock market include the iShares MSCI Japan ETF AUD (ASX: IJP).

Looking for broader exposure to international dividends?

Well, perhaps the Betashares Global Income Leaders ETF (ASX: INCM) might be more to your taste.

The fund tracks 100 high-yielding companies listed outside of Australia.

Of those, 64% are listed in the United States – where dividends grew by 8.3% on a headline basis last quarter to a record US$153.4 billion, Janus Henderson found.

The post Global dividends jumped 12% in the first quarter of 2023. Are you getting your share? appeared first on The Motley Fool Australia.