Global or local

Investors seeking protection from foreign geopolitical risks may find their national equity market does not offer what they are seeking. For instance, the US equity market derives only 60% of its revenues from the US. Across Western Europe those percentage are even lower with the German equity market deriving 27% of its revenues domestically and France an even lower at 16%. Emerging markets tend to be the most domestic in their revenue sources with for instance China and India deriving 89% and 75% of revenues domestically, respectively. Sector dynamics help explain revenue exposure with technology being the most global while utilities and financial services are more domestic. Interestingly, despite geopolitical tensions, just 16 out 48 markets became more domestic in their revenue sources compared to last year. We recently published an article about this topic, read it here.

Source: Morningstar, May 2024.