Many experienced investors will say that, once you've been investing for a while, you should start to look further afield and consider adding some international investments to your holdings. There are many reasons for this:
- Many of the world's biggest and/or best companies like Alphabet (Google), L'Oreal, and British Petroleum (BP) aren't listed on the ASX
- The Australian market is finance and resource driven, meaning a downturn in these areas can affect the entire economy even if the companies you own aren't directly exposed
- You are already 'all-in' on the Australian economy – just think of your house, your superannuation, your job…
Put like that, looking for global diversification is a no-brainer. Many popular brokers let you trade shares on foreign exchanges. You can also find Australian businesses with most of their earnings overseas, like the following 3 companies:
Westfield Corp Ltd (ASX: WFD) – A shopping centre builder and operator, Westfield has its operations split between the US and several major cities/countries in Europe. It reports in US Dollars although it also earns in Pounds and Euros. I'm not too keen on the company because of its valuation, but would own it at a lower price.
Servcorp Limited (ASX: SRV) – this serviced office and virtual office provider has businesses in more than 20 countries worldwide. Although cyclical and sensitive to a wide variety of business conditions, Servcorp appears prudently managed, with a decent balance sheet, and highly experienced, long-serving management.
CSL Limited (ASX: CSL) – a global provider of vaccines and blood products, CSL reports in US Dollars but earns in a wide variety of currencies in many countries. The company's strong portfolio of treatments and pipeline of new products will stand it in good stead over the long term, although shares look expensive right now.
This is just an abbreviated list, but readers can find a wide variety of ASX companies with earnings in a diverse range of industries. Some earn primarily in foreign currencies, some earn primarily in AUD but have minor international prospects that could grow much larger, and yet others are about half-and-half. Adding global diversification to your portfolio is easier than you think.
