Australian shares vs international shares is not really a battle. For many investors, the better question is how both can work together in one sensible portfolio.
There are over 2,000 listed entities on the ASX to invest in.
Step outside Australia, and the opportunity set becomes far broader again – globally you will find roughly ~60,000 more. This is an overwhelming number for any investor, which is why it often feels more comfortable to stay close to home and invest domestically. There’s a whole wide world out there, though, which can provide alternative investment options and returns. Investing beyond your home ground can provide access to industries that barely exist on the ASX, and exposure to many of the world’s largest companies. ASX shares offer familiarity, local-currency exposure, and, in many cases, attractive dividend income.
The key point is simple. You do not need to pick sides.
Why Australian shares appeal
Australian shares are the natural starting point for many of us.
The companies are easier to follow. The news lands during local market hours. In some cases, you can see the products, use the services, and build conviction through everyday experience.
There are also practical advantages. You are investing in the same currency you earn and spend. You avoid direct foreign exchange exposure. Many Australian companies also pay dividends, and franking credits can be valuable for some investors.
That said, the ASX has its limits.
The local market is relatively concentrated. Banks, miners and a small group of large businesses make up a meaningful share of the index. So while an Australian share portfolio may look diversified at first glance, it can still lean heavily on a few sectors and economic drivers.
Why international shares matter
This is where gaining global exposure can improve your portfolio.
International markets give investors access to world-class companies in sectors like technology, healthcare, consumer brands and industrial businesses that you just can’t get here in Australia. Think Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Nike Inc (NYSE:NKE), Tesla Inc (NASDAQ:TSLA), NVIDIA Corp (NASDAQ:NVDA), etc. world-leading businesses that you can own a small chunk of.
In most cases, the markets run overnight, which can reduce your bias and pressure to sell as everything happens while you’re asleep.
A portfolio with international shares is usually better diversified. It is less dependent on the Australian economy, Australian interest rates and the performance of local banks and resource companies. While it doesn’t give you a risk-free portfolio, it can create a greater balance long-term.
How to think about portfolio allocation
Portfolio allocation matters more than trying to decide whether Aussie shares will outperform the rest of the world over the next 12 months.
Ultimately, the path you take to construct your portfolio will (as always) depend on your situation and your investment objectives. If you’re leaning into growth, then perhaps a higher weighting toward international shares, whereas a more income-focused investor may prefer a greater exposure to Australian shares. This is particularly the case if dividends and franking credits are a priority.
ETFs can simplify ownership and make it easy to stick to a sensible allocation.
Whichever way you go, Rask Invest has your exposure covered with a diverse range of ETF portfolios.
The Rask recap
“¿Por qué no los dos? For most investors, the answer to Australian shares vs international shares is not one or the other. It is both.
Australian shares can provide familiarity while having a finger on the pulse of the market. It also gives income and local exposure. International shares can provide scale, diversification and access to industries missing from the ASX. A sensible portfolio usually combines the strengths of both, made easy by the use of ETFs.
The real goal is not choosing the perfect market. It is about building a diversified, easy-to-manage portfolio suited to your long-term goals.
