Asset Allocations by Country and Asset Type

chiang_mai

An interesting visulisation showing how assets are allocated by country, based on Goldman Sachs data.

https://www.visualcapitalist.com/how-investors-allocate-their-investments-by-country/

Country	U.S. Equities	Domestic Equities	Rest of World Equities (ex U.S.)
🇺🇸 U.S.	78%	N/A	22%
🇳🇴 Norway	48%	12%	40%
🇨🇦 Canada	45%	49%	6%
🇩🇰 Denmark	43%	40%	17%
🇦🇺 Australia	37%	33%	30%
🇪🇺 Euro Area	36%	46%	18%
🇬🇧 United Kingdom	34%	19%	47%
🇸🇪 Sweden	31%	50%	19%
🇳🇿 New Zealand	27%	53%	20%
🇨🇭 Switzerland	26%	32%	42%
🇯🇵 Japan	19%	78%	3%

jimjames

Interesting. I need to re-run my portfolio analysis but they look quite similar to my splits

InvesterJones

I wonder what the 'rest of world' split is that the UK folks mostly invest in.. mostly Europe perhaps?

chiang_mai

Looks like the Japanese and Americans have massive home country bias, which fits with the picture I have of them.

masonic

While Japan is a massive bias, the US bias is only slight over and above buying the investable global market. I'm also surprised by Canada, who essentially splits equally between themselves and the US with little elsewhere. I wonder if this has changed after recent events.

leosayer

Interesting table. Is there any explanation for the likely reasons for this?

I'm aware that Canada gives tax benefits for investing in domestic equities which may explain that country's high domestic allocation.

Similar tax breaks were proposed in the UK but not implemented. Do other countries do this?

New Zealand's numbers are insane. 53% home bias in a country that represents around 0.3% of global market cap.

Cus

Every country has a home bias.  The US share of the all world index is 63%, so with the US investing 78% then the favour their own country by 23%.  Every other country favours their own country by a much larger factor.  Be interesting to see amounts, and what is was 10 years ago.

masonic

leosayer said:

New Zealand's numbers are insane. 53% home bias in a country that represents around 0.3% of global market cap.

They don't like to stray from the flock.

jifmoose

As well as the other outliers mentioned, it's also interesting how much the UK (and Norway) are outliers. While home bias is still strong, investment in RoW (even excluding US) is over double that of domestic. Presumably this shows strong involvement in EU equities from these countries (now) outside it. (in Norway's case the comparatively tiny domestic economy is a factor of course - though compare Switzerland!).

Cus

It's a bit sad that the UK don't want to invest in their own domestic equity compared to the others (excl Norway but someone said they have a tiny domestic equity...since Nokia went rubbish 😁)

eskbanker

Cus said:

It's a bit sad that the UK don't want to invest in their own domestic equity compared to the others (excl Norway but someone said they have a tiny domestic equity...since Nokia went rubbish 😁)

Why would a Finnish company affect the Norwegian stock market?