It’s the difference that makes the difference

 

At the core of global share investing is the difference between regions, countries and companies. By investing in companies from across the globe you get access to a whole range of valuable differences:

  • Different patterns of return
  • Companies from different regions generate different rate of return in different ways. Australian companies tend to pay higher dividends than global shares. That can be attractive to those chasing income but may not be the best approach if you want long-term capital growth. Because global companies pay lower dividends (in general) they can invest more back into the business, underpinning longer-term revenue growth.

  • Strengths in different sectors
  • As Garry explain in his video, different investment regions are dominant in different sectors. Europe is strong in fashion and autos, the US in tech, Japan in consumer appliances. Global share investing gives you exposure to all those strengths, but you still need deep research and analysis to find the best companies in each region and sector.

    Global diversification also allows you to benefit from changes in those regional strengths. Fifty years ago, the idea that Made in Japan would be a watchword for quality control would have been laughable. Just 20 years ago, China was growing on the back of cheap labour. Today, China's digital companies – Weibo, Tencent, Vipshop and more, rival the American giants in their growth rates and profitability. 

  • Investing, Global Style
  • As Garry explains, the different regions have unique business cultures and regulatory structures that affect how you rate and value companies. In some parts of Asia, the payoff for less-than-perfect disclosure is that you can find undervalued gems – if you do enough deep, cautious analysis of your own. That’s less true in America where the size of the analyst community makes it harder to find information that’s not already “in-the-price”.

 

Finding the value in difference

Navigating the pros and cons of different investment regions is what Garry Laurence and his team do every day. The secret to turning that analysis into returns for investors lies in the underlying focus on individual businesses.

For Perpetual, regional differences do matter. But those differences are built into analysis at the company level. The focus is always on finding high quality, undervalued businesses, wherever they are in the world and pooling them into a portfolio that makes a real difference to investors.

 

Find out about the potential returns from investment opportunities unconstrained by borders.


Why invest with Perpetual?

Our people and our process set us apart from other global fund managers. We apply our experience, insight, and skill to identify global companies with the greatest long-term potential. The Fund's investment process is described in our investment brochure.

This content has been prepared by Perpetual Investment Management Limited (PIML) ABN 18 000 866 535, AFSL 234426 and issued by Perpetual Trustee Company Limited (PTCo) ABN 42 000 001 007, AFSL 236643. It is general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. Any views expressed in this document are opinions of the author at the time of writing and do not constitute a recommendation to act.