Global GDP Share vs. Equity Opportunity Set

The following chart shows the world GDP share between the US, other developed and emerging markets and the global equity investment opportunity set. The US accounts for just 15% of the global GDP but over 31% of firms over $5 billion in market capitalization in the world are US-based. This is because many of the world’s highly successful firms are located in the country especially in the tech sector. Even in other sectors such as basic commodities like coffee, Starbucks Coffee(SBUX) dominates the world. The other point to remember is the universe of international stocks is huge as they are home to 69% of companies with over $5 billion market caps. So for investors looking to diversify globally there are plenty of companies available to invest in foreign markets.

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Via Bourbon Financial Management

Disclosure: No Positions

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