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Forward Thinking Magazine : December 2010
36 Macquarie Adviser Services Global business Headquartered in Finland, KONE is one of the world’s leading elevator manufacturers, and is a great example of a globally diversified business. Generating revenue from a variety of different markets and businesses, its service model provides the repeat business that underpins the company’s ongoing revenue generation. KONE has also had significant success in developing countries, earning approximately 21 per cent of its revenue from the Asia – Pacific region (with China being the largest component) in 20106. Novo Nordisk is another truly global business. Based in Denmark, Novo has international production facilities in seven countries and distribution in 179 countries, making it one of the world’s largest suppliers of insulin and related products. Providing insulin to a highly loyal customer base of Type II diabetes sufferers, Novo has seen rapid growth in the US, and significant revenue growth from emerging markets, including China7 . Accessing global equities When considering an investment in global equities, many investors make the mistake of associating the returns of specific stocks with the performance of the broader market. Looking back over the past decade in international equities, poor overall performance, high levels of market volatility and a number of obvious winners and losers highlight the importance of good stock selection. Selecting which international equities to invest in can be quite a challenge. Few individual investors have access to the resources required to complete thorough company analysis, and make truly informed investment decisions. For many Australian investors, accessing global equities requires selecting from a wide variety of global stock portfolios. Although the broader market performed poorly since 2000, there are numerous examples of active managers that performed exceptionally well over the period. That is because the best active global equity investment managers have been able to protect investors’ wealth in market downturns and capture significant upside during periods of positive performance. Through a rigorous process of due diligence, the Macquarie Professional Series has identified a selection of world class global investment managers, offering Australian investors access to a selection of truly differentiated investment portfolios. Companies like Walter Scott, Franchise Partners and Arrowstreet Capital share the hallmarks of great investment management; long term vision, integrity and unwavering conviction. 1 1/1/2000 to 31/10/2010. Source DataStream (includes dividends). Australian equities have actually grown by 8.0 per cent pa since 2000, outperforming international equities by 11.5 per cent each year during the period. 2 Iress, Based on contribution to return of S&P/ ASX 200 Index (excludes dividends). 10 years to July 2010 3 Source: Department of Foreign Affairs and Trade, 2010 4 Source: CBA, Sept 2010 5 Source: MSCI, October 2010 6 Source: Independent Franchise Partners, November 2010 7 Source: Walter Scott & Partners, November 2010