Outperforming Australian market prompts hunt for fresh pastures

AUSTRALIAN shares have outperformed most global markets in 2022 and it’s prompting investors to look offshore for cheaper stocks.

While tumbling global stockmarkets have hit investment portfolios and super nest eggs, wealth specialists say weakness also breeds opportunities.

Since January 1, the ASX 200 index has dropped 2.2 per cent, making it a top performer among 10 key indices across the US, Europe and Asia.

It has climbed 0.8 per cent in the past month despite Russia invading Ukraine.

The worst performers of the year are the tech-heavy and growth-focused Nasdaq index in the US, down 12 per cent, and China’s Shanghai Composite index with a 12 per cent fall.

Catapult Wealth director Tony Catt said he believed “growth stocks in overseas markets are now oversold”.

“Good companies like Apple and Google (Alphabet) are still good companies and are still going to be growing for the next 10 years,” he said.

Mr Catt said Europe was hardest hit by geopolitical worries and could see elevated energy costs for longer and greater consumer spending risks.

“It’s a geopolitical risk you probably don’t need to take in the short term,” he said.

Mr Catt suggested investing across indices or with good active managers, and “not trying to pick three stocks where you just don’t get enough diversification”.

ETF Securities head of distribution Kanish Chugh said several of the FAANG stocks – Facebook (now Meta), Apple, Amazon, Netflix and Google – had dropped about 20 per cent by mid-march.

But he also said India’s Nifty 50 index had been one of the year’s best performers.

“Don’t have blinders on,” Mr Chugh said.