Pathfinder Monthly Commentary
The total market capitalisation of domestic companies listed on the NZ stock exchange is NZ$52 billion. While this seems like an enormous amount of money, it is small in a global context. In fact the NZX capitalisation is close to zero (only 0.06%) as a proportion of global equity markets. In this commentary we look at the significance (or otherwise!) of the NZ market – and share thoughts about why some international diversification is important for investors.
1. The NZ and US markets compared
The market of all US listed stocks is 37 times larger than the NZ market (measured by the number of stocks in the NZX All Index). Based on market capitalisation the size difference is even more massive – the US market is 486 times larger. Here is a quick look at the relative scale of the NZ and US markets:
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