BEYOND THE BACKYARD: How EFTs Are Powering Aussie Portfolios

Australians love to travel and explore the world - but when it comes to investing, we often stay close to home. Many investors prefer local shares, especially those that pay dividends, and feel more comfortable with familiar brands. Concerns about currency risks have also played a role in this home- focused approach.

Going Global: How ETFs Are Expanding Aussie Portfolios

Only 16% of Australian investors currently hold international shares, compared to 58% who invest domestically¹. But that started to change in 2024, as strong global markets, especially in the US – led to a significant increase in Australian assets invested overseas². However, in 2025, uncertainty around trade policies has led many investors to shift back to Australian stocks³.

Why global diversification matters

While markets can go up and down in the short term, investing globally is still a smart long term strategy. The Australian share market makes up only about 2% of the global market and is heavily focused on sectors like banking and mining⁴. This means investors may be missing out on growth in areas like technology, which have delivered strong returns in places like the US and China.

Global Growth Opportunities

Big tech companies have played a major role in recent market gains, and exciting developments in artificial intelligence have boosted performance in parts of Asia⁵. Meanwhile, government support in Europe has helped deliver one of the strongest quarters in years⁶, showing that global markets beyond the US also offer great potential.

Why More Australians Are Investing Globally

Investing globally gives access to a wider range of industries and countries, helping reduce risk and build stronger portfolios⁷. Exchange Traded Funds (ETFs) make this easy and affordable, offering a simple way to invest in international markets. Between 2023 and 2024, ETF investing in Australia grew by 11%, with many people choosing them to diversify. Financial advisers are also increasingly recommending global investments⁸ for long-term growth.

Managing Currency Risk When Investing Globally

If you're concerned about exchange rate changes, currency-hedged investment options can help. They offer added flexibility and can be especially useful during times of uncertainty – like shifts in the US dollar or rising government debt.

ETFs Are Growing Fast in Australia

The Australian ETF market has grown quickly, reaching over $270 billion in assets by mid-2025. While that’s impressive, it’s still small compared to the global ETF market, which is now over US$13 trillion⁹. As more Australians turn to ETFs, there are more opportunities than ever to diversify and invest in global growth.

Looking Beyond Local: The Power of Global Investing

Expanding your investments beyond Australia can open up more opportunities and help build a stronger, more balanced portfolio — without adding complexity or high costs.

¹ Source: 2023 ASX Investor Study

(note: study is conducted every 3 years)

² Source: Department of Foreign Affairs and Trade, as of 31 December 2024

³ Source: BlackRock data as of 28 July 2025

⁴ Source: S&P Dow Jones data as of 30 June 2025

⁵ Source: BlackRock data as of 30 June 2025

⁶ Source: Bloomberg data as of 31 March 2025

⁷ Diversification and asset allocation may not fully protect you from market risk.

⁸ Source: Investment Trends 2024 ETF Report

⁹ Source: State Street Investment Management as of 9 July 2025

Important Information: This material has been created with the co-operation of BlackRock Investment Management (Australia) Limited (BIMAL) ABN 13 006 165 975, AFSL 230 523. This material provides general advice only and does not take into account your individual objectives, financial situation, needs or circumstances. Before making any investment decision, you should obtain financial advice tailored to you having regard to your individual objectives, financial situation, needs and circumstances.

Refer to BIMAL’s Financial Services Guide at blackrock.com/au for more information. This material is not a financial product recommendation or an offer or solicitation with respect to the purchase or sale of any financial product in any jurisdiction.

Your Vision Financial Solutions Pty Ltd ABN 64 650 296 478 and its Advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. This article has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this article you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.