A global portfolio can enable investors to benefit from the rapid and transformational changes reshaping the world. Four key long-term structural changes are driving growth around the globe – rising wealth; technological innovation; dynamic reinventions of countries, companies, and industries; and changing demographics, particularly ageing populations. Emerging markets are at the forefront of all these transformations.

The global economy is expected to more than double in size by 20501, and economic power is set to shift away from the G7 economies towards emerging markets, underpinned by population growth that will fuel domestic demand, create new business opportunities, and attract fresh investments2.

A Need for Global Diversification

Many investors, however, are not well positioned to take advantage of these opportunities, as their portfolios tend to be disproportionately exposed to their home market. OppenheimerFunds’ Generation Project3 research found that while 88% of U.K. high-net-worth investors hold U.K. equities in their portfolios, only 62% hold international equities. This “home bias” means that many investors’ portfolios are not only overexposed to the idiosyncrasies of their home market, but also may be missing out on the opportunities for future growth and outperformance offered by the rest of the world.

The paper Globalise Your Portfolio examines how a global approach may allow investors to:

  • Capture the multiple opportunities created by a changing world,
  • Pursue the most compelling investment opportunities anywhere, irrespective of location,
  • Potentially maximize their pursuit of strong risk-adjusted returns.

Strategies that can be harnessed to create a more globalised portfolio include:

  • Global or international equity funds
  • Emerging market equity funds
  • International bond funds

Download Globalise Your Portfolio

 
  1. ^PwC: The World in 2050
  2. ^MSCI indices; net; USD; 31 Aug 2018
  3. ^OppenheimerFunds Inc. partnered with the research firm CoreData, to survey nearly 2,000 investors and advisors in the U.S. and the UK. CoreData Reseach LLC is not affiliated with OppenheimerFunds Inc