Overseas vs. Australian Investing

[Tysonboss1]

After having a managed investment that has been investing over seas 50% hedged for the past few years it seems that my Aussie investments have always out performed my international ones,

I am considering changing my investments so that I am invested 100% in Australia so my only over seas exposure will be limited to Australian companies with operations over seas, eg westfeilds, toll and sims group etc etc.

what do you guys think,... is there anything I wll be missing taking this stratergy.

 

[prawn_86]

Re: Overseas vs Australian Investing

what do you guys think,... is there anything I wll be missing taking this stratergy.

Possibly missing out on emerging economies.

Also reduce your hedging/diversification as Aus is heavily reliant on commodities as im sure you know.

 

[Judd]

Re: Overseas vs Australian Investing

Yes, it is a bit of a dilemma as the Oz market is only about 2% or so of the world market. We placed our money with Vanguard International Index Hedged, Hunter Hall Value Growth and Platinum Capital. The last two because they are prepared to take the bets.

 

[Tysonboss1]

Re: Overseas vs Australian Investing

Yes, it is a bit of a dilemma as the Oz market is only about 2% or so of the world market. We placed our money with Vanguard International Index Hedged, Hunter Hall Value Growth and Platinum Capital. The last two because they are prepared to take the bets.

how have they been doing,

 

[Bill M]

Re: Overseas vs Australian Investing

Hello Tysonboss1, I hear what you are saying and I understand your thoughts. I had a small super fund with the old National Mutual, it performed very average so in 2001 I decided to get out and go with someone better. I thought to myself ok, I'm totally invested in Australia so I think a small part of my super should go into an international fund. What a big mistake that was!

From 2001 until now this fund is showing me a 23% loss!!! I decided last year to bail out and I put it in an industry fund and it is doing a bit better now. I have kept track of the old fund and it's still losing 23%. What did this overseas fund do for 7 years?

As upset as I was I sent a letter to the fund manager to ask for an explanation. It was like a 13 year old child giving me a simplified answer. I said in very clear words in my letter, "how can a nobody like me do better than the best qualified fund managers"? His reply was that they didn't hedge the AUD and that "we have told you everything about this fund and we have nothing further to add". I had no choice but to move my super to an Australian Industry Fund (I don't have a SMSF). I am very happy that I got out of that overseas fund, cheers.

 

[Tysonboss1]

Re: Overseas vs Australian Investing

Hello Tysonboss1, I hear what you are saying and I understand your thoughts. I had a small super fund with the old National Mutual, it performed very average so in 2001 I decided to get out and go with someone better. I thought to myself ok, I'm totally invested in Australia so I think a small part of my super should go into an international fund. What a big mistake that was!

From 2001 until now this fund is showing me a 23% loss!!! I decided last year to bail out and I put it in an industry fund and it is doing a bit better now. I have kept track of the old fund and it's still losing 23%. What did this overseas fund do for 7 years?

As upset as I was I sent a letter to the fund manager to ask for an explanation. It was like a 13 year old child giving me a simplified answer. I said in very clear words in my letter, "how can a nobody like me do better than the best qualified fund managers"? His reply was that they didn't hedge the AUD and that "we have told you everything about this fund and we have nothing further to add". I had no choice but to move my super to an Australian Industry Fund (I don't have a SMSF). I am very happy that I got out of that overseas fund, cheers.

Mine was 50% hedged so it has done a bit better at about 6%p/a over the last five years, But yeah I have the same feling as you.

I have great faith in or little country so even though it is only 2% of the world market, i am thinking about focusing on australian investing, after all even the late kerry packer said Australia was his favourite place to invest.

oe down side I guess is that if the aussie $ weakens then then what has been making our investments do poorly might turn around,... but who knows

 

[josjes]

Re: Overseas vs Australian Investing

Hello Tysonboss1, I hear what you are saying and I understand your thoughts. I had a small super fund with the old National Mutual, it performed very average so in 2001 I decided to get out and go with someone better. I thought to myself ok, I'm totally invested in Australia so I think a small part of my super should go into an international fund. What a big mistake that was!

From 2001 until now this fund is showing me a 23% loss!!! I decided last year to bail out and I put it in an industry fund and it is doing a bit better now. I have kept track of the old fund and it's still losing 23%. What did this overseas fund do for 7 years?

As upset as I was I sent a letter to the fund manager to ask for an explanation. It was like a 13 year old child giving me a simplified answer. I said in very clear words in my letter, "how can a nobody like me do better than the best qualified fund managers"? His reply was that they didn't hedge the AUD and that "we have told you everything about this fund and we have nothing further to add". I had no choice but to move my super to an Australian Industry Fund (I don't have a SMSF). I am very happy that I got out of that overseas fund, cheers.

Hi Bill

I am in the same boat as you. But you are so much luckier than me. I still have a chunk of my investments in overseas shares with no hedge.

I now understand why this is happening. It's INFLATION globally and the Commodity Boom. Starting 2001, shares have been a dog of a performance if you don;t invest in commodity countries and commodity shares. Industrial companies barely managed to keep up increasing their earnings above inflation rate. It is esp. true if you have invested in US shares. Dow in 2000 and 2008 is barely at the same level, add to the US$ dog performance, then you see why your international shares are down 23%.