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
- Strengths in different sectors
- Investing, Global Style
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.
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.
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.
Years of experience: 15
Years at Perpetual: 10
Garry joined Perpetual in March 2008 as an Analyst and has covered a broad range of sectors. He now holds the title of Global Equities Portfolio Manager for Perpetual Investments and has been managing the Global Share Fund since its inception in January 2011. Prior to this, Garry was co-portfolio manager of an Asian fund from 2009-2011.
Prior to joining Perpetual, Garry had three years with PM Capital as an Analyst covering the financial sector for global and Australian strategies and one year with Commonwealth Securities as an Analyst. While studying Garry gained experience at Morgan Stanley and Meridian Equities as an Analyst. During this time he covered a broad range of sectors across large and small cap companies, including food and beverage, construction and resources.
Garry has a Bachelor of Commerce and a Bachelor of Laws from the University of New South Wales.