Local bias rewards investors
Australian investors are being rewarded for their attraction to domestic equities, according to a new analysis released by PennyWise Investments.
The latest PennyWise Investments Assetmax ETF report said the reward for sticking close to home had been that the ASX200 had outperformed global markets in recent months, rising 5.9 per cent in September, compared to only 2.9 per cent for the world MSCI equity index benchmark.
PennyWise Investment founder and managing director David Bassanese said investors needed to be aware that international exchange traded funds (ETFs) listed on the Australian market were priced in Australian dollars, meaning local investors bore the currency risk of the foreign markets they invested in.
He said Australia’s ability to dodge recession had impressed the world, driving up the Australian dollar and allowing local stocks to outperform their global peers.
“And with local interest rates expected to increase again in coming months, it's likely the Australian dollar will rise further,” Bassanese said.
AUTHOR
Mike Taylor
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