Does Home Country Bias Affect Investor Returns?

As the world's biggest blue chips are thoroughly global, they cannot help being affected by what happens internationally

John Rekenthaler 26 February, 2019 | 12:30PM

Mount Fuji, Japan

Equity portfolios can't help being global. Multinationals account for most stock market assets, and they sell their wares everywhere. Where a blue-chip company is headquartered does not indicate its revenue sources.

According to Morningstar's latest calculations, 62% of revenues for S&P 500 companies come from the United States. As S&P 500 firms account for 80% of the capitalisation of the Wilshire 5000 - which reflects the majority of US traded stocks – that index scores similarly. Consequently, shareholders of major US stock market index funds have about 40% foreign exposure, as measured by corporate revenues.

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About Author

John Rekenthaler

John Rekenthaler  John Rekenthaler is vice president of research for Morningstar.

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