At around €27 billion, Ireland’s largest listed company, CRH, represents around 0.03% of the market value of global listed businesses.
Clearly, if you limit yourself to investing in Irish market, you are accessing only a tiny proportion of what’s out there.
Only a few industries
What’s more, if your money is focused on Irish businesses, it’s likely to have a heavy skew towards a handful of industries – financials like AIB and Bank of Ireland, building materials groups like CRH and Kingspan, and property.
Where, for example, are the technology growth exposures like Apple and Tencent, or big industrials like Caterpillar and Samsung?
If your portfolio is oriented towards the Irish market, it’s likely you’re missing out on some key investment sectors.
Dependence on the Irish economy
On top of that, you are placing a lot of reliance on Ireland’s relatively small economy. Recent history tells us that can be risky.
And remember, if you work here, or you’re a property owner, you already have a heavy financial exposure to the Irish economy. That’s another reason to focus your investment money on international opportunities.
Funds for international diversification
Investment funds are the logical way to achieve international diversification, because they hold numerous global stocks within a single fund.
Aviva/ Merrion’s Multi-Asset 70 fund, for example, has chip-maker Broadcom, Apple and Microsoft as three of its top five holdings. The fund also offers exposure to global banks like JP Morgan Chase and Citigroup, energy companies and global bonds.
In the five years to the end of February 2018, this fund had an annualized return of 9%.
Zurich’s 5 * 5 equity funds also offer a route to creating a global portfolio. Their 5 * 5 global fund gives exposure to technology stocks like Alphabet (aka Google), Facebook and Alibaba, but also industrials like Honeywell, Caterpillar, and Arcelor Mittal.
It also comes in Americas-, Europe- and Asia-Pacific-focused versions. The global fund has grown at an annualized rate of 6.5% since its launch in 2001, and 10.3% over the ten years to the end of April 2018.
Talk to Moneycube today about how you can invest in funds to gain exposure to global opportunities for growth.
