http://bespokeinvest.typepad.com/bespok ... -worl.html
Percent of World Market Cap by Country
Yesterday we highlighted that the United States' market cap as a percentage of global market cap has been on the decline. Below we provide a table of the numbers for 29 other countries. As shown, US stocks still dominate world market cap by a wide margin at 29.9%. Japan has the second largest stock market representation at 8.2%, followed by the UK (6.8%), China (5.4%) and France (4.4%). China is noteworthy because it made up just 1.7% of global market cap at the start of 2004, and now it has the fourth largest representation.
We also sorted the list of countries by how much their % of world market cap has changed since the start of 2004. As shown, Saudi Arabia has increased the most at 877.5% -- going from 0.1% to 0.9%. Saudi Arabia is followed by Egypt, Qatar, Brazil, UAE, China, Russia and India. With oil's enormous rise over the last few years, it's no surprise that many of the countries with the biggest gains are major oil producing countries. The US is at the very bottom of the list with a significant decline of 31.6%. Japan is down 20%, the UK is down 12%, Italy is down 10%, and France is down 5%.
U.S. % of global market cap down to 30%
Hmm. According to S&P/Citigroup, the U.S. % is more like 41%
http://www.globalindices.standardandpoo ... urrency=us
http://www.globalindices.standardandpoo ... urrency=us
Yeah I think they are talking about the total market cap and not the free float market cap. The total market cap does skew the results for countries like China, Russia, Brazil with big government companies which are not free floating.DaveTH wrote:Hmm. According to S&P/Citigroup, the U.S. % is more like 41%
http://www.globalindices.standardandpoo ... urrency=us
With total market cap with the S&P numbers it seems more like ~33%
Top 10 World GDPs end of 2007..
1 United States 13,843,825
2 Japan 4,383,762
3 Germany 3,322,147
4 China 3,250,827
5 United Kingdom 2,772,570
6 France 2,560,255
7 Italy 2,104,666
8 Spain 1,438,959
9 Canada 1,432,140
10 Brazil 1,313,590
I always wondered why Total international funds don't weight by GDP..
China makes up about a little over 2% of the Vanguard FTSE internanational fund..yet it has the 4th highest-very close to 3rd highest GDP in the world.
1 United States 13,843,825
2 Japan 4,383,762
3 Germany 3,322,147
4 China 3,250,827
5 United Kingdom 2,772,570
6 France 2,560,255
7 Italy 2,104,666
8 Spain 1,438,959
9 Canada 1,432,140
10 Brazil 1,313,590
I always wondered why Total international funds don't weight by GDP..
China makes up about a little over 2% of the Vanguard FTSE internanational fund..yet it has the 4th highest-very close to 3rd highest GDP in the world.
GDP is a much bigger pie than the share of the economy that is available to investors. more private / government companies = smaller representation in TSM funds.plake15 wrote:Top 10 World GDPs end of 2007..
1 United States 13,843,825
2 Japan 4,383,762
3 Germany 3,322,147
4 China 3,250,827
5 United Kingdom 2,772,570
6 France 2,560,255
7 Italy 2,104,666
8 Spain 1,438,959
9 Canada 1,432,140
10 Brazil 1,313,590
I always wondered why Total international funds don't weight by GDP..
China makes up about a little over 2% of the Vanguard FTSE internanational fund..yet it has the 4th highest-very close to 3rd highest GDP in the world.
Equity markets generally are what you and I can invest in. The correlation of GDP and Equity markets are not that great.plake15 wrote:I always wondered why Total international funds don't weight by GDP..
Example: Although Germany's GDP is significantly larger than that of France or Britain, the equity markets of both France and the UK are larger. In fact Britains' equity market is 2.5 times larger than Germany's market. The larger German GDP reflects that family businesses (including very large private corporations) make up a very large portion of the economy. But neither you nor I can invest in those. Because of the collapse of the Deutsche Reichsmark and economic collapse after WWI and II, many Germans think that investing in equity markets is a greater risk than do persons of many other countries.
Like everything else in life, this too is changing, but one of my cousins living in Bavaria, now in his late 60's, could have invested his money in equity or real estate. He is owner of two homes and two apartments, never touched stocks.
canucknyc summed it up well and beat me to the punch, but my example above should help in explaining the concept.
Read recently that China's GDP has overtaken Germany's GDP but their equity market is still much smaller.