If you’re looking to rejig your Australian share portfolio, or feel a little down in the dumps watching stocks around the world hit record high after record high as the ASX 200 still languishes below its pre-GFC peak, the chart below may be of interest.
From Macquarie Bank’s research team, it looks at the share price performance of Australian listed companies that derive a significant proportion of earnings from offshore compared to the broader ASX 200.
Those companies with a greater reliance on offshore earnings have outperformed the broader index by some margin since the middle of 2016, including in the most recent reporting season.
“The offshore earners beat Macquarie expectations across adjusted NPAT, outlook/guidance, top line performance, margin improvement and cost performance to a greater extent than the broader Macquarie universe,” the bank says.
It says much of this has been driven by stronger economic conditions abroad than in Australia, a trend that that it expects will continue.
“The results by the offshore earners are consistent with our preference for exposure to faster-growing markets and the synchronised global upswing which we expect will continue to support these companies,” Macquarie says.