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Authored by: Vontobel Asset Management’s Quality Growth Investment Team

This white paper, originally released in April 2019, is updated quarterly. The current edition is updated with data as of September 30, 2019.


A world of shifting performance among regions and countries makes it exceedingly difficult to pick winners at all the right times over the long run. It may also favor those who simply choose to go global.

Look at a world map from just half a century ago, and you’ll easily spot its continents in the same locations as they are today. Yet the economic face of it—a dimension not captured by cartographers—has transformed beyond recognition: Levels of commerce and integration among people, businesses, and nations are immeasurably higher, as if any divisions of land have simply dissipated.

This process of globalization has been going on for quite some time. But we believe it has reached levels that should prompt investors to avoid “home bias” and to think beyond their borders in pursuit of attractive performance in the longer run—for a number of reasons.

The globalization of company revenues

First, with a quick look around the world, investors can find strong companies on both sides of the hemisphere. What’s more, these companies draw substantially on both local and foreign markets for business. Consider two eye-opening facts in recent data:

  • The top 10 U.S. companies by market capitalization generated an average of about 40% of their revenues outside the American continent.1
  • The top 10 companies by market capitalization throughout developed markets outside the United States and Canada generated approximately 31% of their revenues, on average, in the Americas.1

Indeed, thriving companies aren’t bound by geography—not in where they are headquartered, nor in where they derive their income—and reflect an opportunity set for investors that is meaningfully distributed across major regions.

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1Source: Factset. Year-end revenues for 2018 of the top 10 companies by market capitalization in the S&P 500® Index (excluding Berkshire Hathaway, a holding company) and MSCI EAFE Index®, respectively. The S&P 500® Index is a free-float market-capitalization weighted index of 500 of the largest U.S. companies. The index is calculated on a total return basis with dividends reinvested. The MSCI EAFE® Index (net) is a free-float-adjusted market-capitalization weighted index that measures developed foreign market equity performance, excluding the U.S. and Canada. The index is calculated on a total return basis with net dividends reinvested. The indexes are unmanaged, their returns do not reflect any fees, expenses, or sales charges, and they are not available for direct investment.