According to the Vanguard 2024 Index Chart, US shares have outperformed Australian shares over the past 30 years. They have increased at a compound annual growth rate (CAGR) of 11.1% compared to 9.1% for Australian shares.

This is a notably wide gap. A $10,000 investment in US shares 30 years ago would be worth $237,318, far outpacing a $10,000 investment in Australian shares, which would be worth $135,165.

Given this level of outperformance, let's revisit some of the reasons to invest internationally.

Why go global?

Investing in global equity markets provides investors with exposure to a more diverse range of high-quality industries. 

The ASX is heavily concentrated among a small number of companies in selective industries. The financial sector is vastly overrepresented on the ASX. It contributes around a quarter of the total S&P/ASX 200 Index (ASX: XJO). This is due to the dominance of the 'big 4' retail banks and investment banking giant Macquarie Group (ASX: MQG).

It is a similar story with the large resources companies. These include familiar names such as iron ore giants BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), and Fortescue Metals Group Ltd (ASX: FMG), as well as oil and gas major, Woodside Energy Group Ltd (ASX: WDS).

Then there's pharmaceutical powerhouse CSL Ltd (ASX: CSL), conglomerate Wesfarmers Ltd (ASX: WES), and the two major supermarkets, Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL). 

These companies combined account for over half of the total ASX 200 Index. 

While investors often worry most about losing money from their investments, it can be as damaging to your returns to miss out on strong-performing investments. Exposure to industries and specialised companies that are not as prominent in Australia is a key advantage of international investing. 

In the US, the first sector that comes to mind is technology. The US is home to the high-profile, magnificent seven companies, which have delivered spectacular returns in recent years. It is also home to streaming giant Netflix and Warren Buffett's legendary investment conglomerate Berkshire Hathaway. 

Moving north to Canada, investors can gain exposure to the software industry, which has produced companies like Constellation Software. Meanwhile, Europe is known for its prestigious luxury brands, including LVMH Moet Hennessy Louis Vuitton SE and Ferrari NV.

How to invest internationally?

If you've decided to invest outside of Australia, the next question is how to do it. One way is to buy shares in individual companies. Most brokers offer this option. 

Another option, particularly suitable for beginners, is to buy ASX exchange-traded funds (ETFs) with international holdings. These are bought in the same way as any other ASX share and typically charge a small management fee. 

The Vanguard US Total Market Shares Index AUD ETF (ASX: VTS), which has nearly 4,000 US-listed holdings, is one of the most popular ASX ETFs. It is known for its outstanding level of diversification, low management fee (0.03% per annum), and impressive returns. Over the past five years, the VTS ETF is up more than 100%. 

Those looking for broader geographical diversification may wish to consider the Vanguard MSCI Index International Shares ETF (ASX: VGS). For a management expense of 0.18%, it provides exposure to 1,287 companies, with 73% listed in the US and 27% outside the US. Over the past five years, it has climbed 83%.

By comparison, the ASX 200 Index is up just 47% over the past five years, significantly trailing the VTS ETF and the VGS ETF.

Foolish Takeaway

Investing abroad may be beyond the comfort zone of many ASX investors. However, the benefits can be substantial. It is worth noting that the ASX only constitutes less than 2% of the global equity opportunity and is heavily concentrated in banking, resources, and retail. Expanding your horizons to a global investing universe can provide unique exposure to industries that are simply not available on the local market.

The post A clear case for international investing appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back today are listed below. Here's why they are rising:

Azure Minerals Ltd (ASX: AZS)

The Azure Minerals share price is up 11% to $1.38. Investors have been buying this lithium share since the release of positive drilling results from the 60% owned Andover project. Management said that it is "confident that our project has the potential to host lithium resources of world-class scale."

Eroad Ltd (ASX: ERD)

The Eroad share price is up 64% to $1.16. This follows news that the fleet management solutions provider has received a non-binding takeover offer from Canada's Constellation Software Inc (TSX: CSU). An offer of $1.30 per share has been tabled. This represents an 84.4% premium to its last traded price and values Eroad at $146.8 million.

Predictive Discovery Ltd (ASX: PDI)

The Predictive Discovery share price is up 3% to 16 cents. Investors may believe that this gold share has been oversold recently. Investors were selling down Predictive Discovery's shares following the release of assay results from its ongoing drilling programs at the Bankan Gold Project in Guinea.

Talga Group Ltd (ASX: TLG)

The Talga share price is up 2% to $1.40. This has been driven by news that this graphite developer has received the environmental permit for its commercial battery anode plant in Lulea, Sweden. This allows Talga to commence refinery construction groundworks in the third quarter of 2023. It will be Europe's first commercial natural graphite anode plant.

The post Why Azure Minerals, Eroad, Predictive Discovery, and Talga shares are rising appeared first on The Motley Fool Australia.

Prolific tech acquirer and operator Constellation Software Inc (TSX: CSU) has lobbed a non-binding indicative offer (NBIO) at Eroad via a wholly-owned subsidiary this morning. This follows earlier reports of the Canadian tech company, founded by billionaire Mark Leonard, buying up 17.7% of Eroad shares at NZ$1.30 apiece.

Before today, the Eroad share price sat at $0.705. The company's shares are up 47% over the past month, yet, they are still 54% worse than where they were a year ago. Eroad requested a trading halt before trading commenced today amid management's discussions.

Adding to its tech portfolio

Canadian software powerhouse Constellation Software may not immediately ring bells among Aussie investors. However, valued at approximately A$63.5 billion, the beastly business is on par with the likes of Wesfarmers Ltd (ASX: WES) and Woodside Energy Group Ltd (ASX: WDS).

The company has rewarded long-term shareholders handsomely since its 2006 listing. Constellation Software shares far exceed any benchmark, up 14,560% over their listed life. An achievement made possible through executing its mission to acquire, manage, and build market-leading software businesses.

Having acquired over 500 companies in its history, New Zealand fleet management solutions company Eroad has found its way onto the Canadian's acquisition conveyor belt.

According to a release, Brillian APAC Pty Ltd — part of Volaris group and a subsidiary of Constellation Software — purchased shares in the ASX tech stock on Wednesday. Brillian tallied up 20,025,091 shares in Eroad in total, giving it a 17.7% stake in the company.

Since then, Eroad has received an NBIO for 100% of the company at $1.30. The proposed price represents an 84.4% premium to its last traded price and values Eroad at a market capitalisation of $146.8 million.

For the last 12-month period, Eroad reported NZ$34.5 million cash outflow on NZ$174.9 million in revenue. Furthermore, the company held a net debt position of NZ$62.5 million at the end of March 2023.

What's next for this ASX tech stock?

Today's offer will now undergo the process of due diligence, negotiation, and consideration by Eroad's board. Notably, the release highlighted that the board will evaluate partnership options to drive further growth in its North American expansion.

The ASX tech stock may resume trading today following the proposal announcement.

Following the publication of this article, Eroad shares have since resumed trading on Thursday. At the time of writing, the Eroad share price is up 61.4% to $1.14 on the ASX.

The post Guess which little ASX tech stock this billionaire is looking to acquire appeared first on The Motley Fool Australia.