Credit Suisse has come out with its annual Global Investment Returns Yearbook and as usual, it is full of interesting charts, data and figures. I just thought I would highlight one of them which shows the World Stock Market History over the last 116 years.
Hat tip: Abnormal Returns
A lot can change over 116 years. At the start of the 20th century, the UK markets accounted for a quarter of global market capitalisation. Today, it is overwhelmingly dominated by the US market. The market share of the USA has grown from 15% in 1899 to 53.2% in 2016! This reflects the superior returns of the US markets over the last century. No other market has come close to this kind of performance. And its not that the US was the first to organised trading of securities. That started with Amsterdam in 1602 and London in 1698, and followed later with New York in 1792. It is no wonder that the S&P500 forms such an integral part of most global portfolios and that the US Dollar is overwhelmingly the dominant currency in global trade. The real question is what this chart will look like in the decades to come. Will the US continue to be a large portion of global stock market capitalisation or will the pie become more balanced as emerging markets start to form a larger part of the global economy?
Rishad is the founder of Kairos Capital. He started his career with Standard Chartered Wealth Management and has extensive experience in markets, particularly in terms of mutual funds and stocks.