Australian Share Market Facts
The Australian sharemarket is one of the largest in the world, as measured by the total number of individual shares (2,000+) and value of all the shares on the market ($US1.5 trillion as of 2017).
The Australian sharemarket is very concentrated. That means, the top few companies account for the majority of the sharemarket's worth.
For example, in 2017, the top 5% of companies (around 97 in total) account for over 80% of value and share turnover! The top 10 companies, mostly from the banking and resources sectors, account for 39% of the value.
ETF Market Growing... Fast!
In 2016, the total value of ETF trading on the Australian sharemarket stood at $15.46 billion. In 2017, it was $17.29 billion.
Future Generation Investment Company Just Delivered Another Dividend Raise
Future Generation Investment Company Ltd (ASX:FGX) has just delivered another dividend increase in its FY18 report.
How Future Generation Global Beat The MSCI Index By 6%
Future Generation Global Investment Co Ltd (ASX:FGG) has announced its full year result to 31 December 2018.
Rio Tinto Chief Upbeat On Green Future
Rio Tinto (ASX:RIO) shares rose overnight in London after the mining giant posted record returns for shareholders.
Wilson’s WAM Capital Set To Pay Another Big HY Dividend
WAM Capital Limited (ASX:WAM) announced that it plans to pay another big half year dividend in its result.
WAM Microcap Reports A Major Dividend Hike
WAM Microcap Limited (ASX:WMI) has reported that it will increase the interim dividend in the HY19 result.
WAM Leaders Cranks HY Dividend Despite Tough Market Conditions
WAM Leaders Ltd (ASX:WLE) has decided to increase its dividend payment by 6% in its FY19 half year result.
Australian Share Market Risks
The Australian sharemarket is heavily skewed towards financials (i.e. banks and insurers), resources and property. These companies tend to be 'cyclical', meaning they move in-line with the direction of the broader economy and financial markets.
Some risks to investing in this sector include:
- Market risk: This is the risk that the performance of the ETF/fund rises or falls unexpectedly day-to-day, month-to-month or even year-to-year. We believe these price movements are unpredictable. Therefore, we believe investing for multiple years is the most prudent way to invest.
- Home country bias: That happens when you invest a larger amount of your money in local/Australian investments and exclude overseas markets. This may be because it is 'too difficult' or 'too complex' to invest in overseas markets.
- Concentration: The Australian share market is made up of many companies. However, traditional market indices have a very high proportion of their performance tied to just a few investments, such as blue-chip shares in the financial and resources.
- Regulatory risk: Australia is a market with a robust financial system. Changes to the rules or laws regarding public investments could alter the performance of ETFs and funds in the sector.