Should I sell my Aussie ETF and just invest in Global Shares?

**Jess** (0:00)
I have 10% of my portfolio in Australian Shares and 90% in Global Shares. That's how I built my first portfolio. Lately, I've been wondering, should I get rid of Australian Shares altogether and just invest globally?
Thanks so much to MLC for sponsoring this episode and helping us keep all of our content free. Welcome back to Get Started Investing, a show that helps you make the most of your money. I'm Jess, and as a beginner investor, I have plenty of questions about investing. As it turns out, so do you guys. Each week, I sit down with an expert to tackle them, so we can all become better investors together. Today, we're talking investing in global markets versus Australia with Ren. He pitches me his argument for why Australian shares do deserve a place in your portfolio and why some investors go all global, plus how to decide which approach makes the most sense for you. All righty, let's get into it. Ren, welcome to Get Started Investing.

**Alec Renehan** (0:54)
Jess, good to be here.

**Jess** (0:55)
Good to have you.
Now, I want to kick this episode off with a question from one of our community members, Anand. It is something that has been coming up in our Facebook group, which I've been a big stalker of lately, just to see what people are saying. It's been in the YouTube comments as well, so really keen to play it for you and get your thoughts.

**Anand** (1:13)
Hi, Equity Mates. I recently shifted my portfolio to focus primarily on a global ETF because I see stronger long-term growth, potential outside Australia.
Australia represents only a small share of the global market. Australian equities haven't delivered the same level of growth as many global markets in the long run. I understand the benefits of franking credits, especially when it comes to investing in Australian shares. But in your opinion, what are the strongest reasons for an investor to still allocate a meaningful portion of their portfolio to Australian ETFs? If you get the chance to answer this, I'll greatly appreciate hearing your thoughts. Thanks for all the great content you've put out each week.

**Jess** (1:59)
Thanks, Anand. The reason I was interested in this one is because when I built my portfolio, I did 85 percent global, so a fairly big allocation, but I do have 10 percent still in Australia. I'm wondering if I even need that or if I should just get rid of it.
I wanted to get you in the hot seat and get your views. But I'd love to start with, why is this such a big debate amongst Australian investors right now? Why am I seeing it everywhere?

**Alec Renehan** (2:22)
Yeah, it's a debate right now. That's the thing to start with. And it's a debate right now because Australia is lagging the rest of the world. The Australian market has periods where it does well, but now is certainly not one of those periods. Past 12 months, the Aussie market is up 3 percent.
In the past 12 months, the US market is up 20 percent. The South Korean market is up 113 percent. So people are obviously looking at their investments and saying, well, Australia is lagging. I find Australia boring, and so do I even need Australia.

**Anand** (2:56)
Yeah.

**Alec Renehan** (2:57)
I think in this episode, we'll go through both sides of the argument, but to plant my flag early, I'm going to say don't throw Australia out just yet.

**Anand** (3:05)
Okay.

**Jess** (3:06)
Big call already without even going into it. Yeah, because on that, I actually looked at BGBL, which is my global ETF, verse A200, which is my Australian ETF, and the performance on BGBL has been double, I think.

**Alec Renehan** (3:22)
Depending on your time frame, even more.

**Jess** (3:23)
In the last five years, I looked at.

**Alec Renehan** (3:25)
Yeah. Well, I actually have the numbers. This isn't for BGBL, but the S&P 500, America's index, total return, so this includes dividends, 88% over the past five years. The ASX 200 total return, so including the generous dividends that are paid in Australia, 45% over the past four years. So yeah, it is basically double. The US has doubled Australia.
And that's why people are questioning it.

**Jess** (3:50)
Okay, so it's right to question it.

**Alec Renehan** (3:54)
It makes sense to question it, I would say. Yeah.

**Jess** (3:57)
Right, even though you're saying to keep A200, I want you to make the biggest argument for going all global, if I was to do that. And like Anand has done that in his portfolio, he's already got rid of Australia.

**Alec Renehan** (4:08)