A little more than a decade ago, Ipreo’s Global Market Intelligence team noticed an increasing amount of questions from clients about their shareholders outside of the United States. We’ve been keeping an eye on those numbers, and today we’re happy to publish a report focusing on that trend.
Obviously, the shareholder bases of most U.S. companies are dominated by domestic institutions, but over the past decade-plus, not only has the proportion of international shareholding grown, so has the number of U.S. issuers who’ve created a structured approach to international outreach.
Our latest Special Report takes a deeper look at the growth of international investors in the U.S. capital markets. The report investigates why, between the years of 2005 and 2015, the proportion of international investment in S&P 500 stocks was growing even while issuers were facing significant outflows, and takes a look at how things changed in 2016.
Between 2005 and 2015, the median proportion of international investment in S&P 500 stocks more than doubled, from 7.0% of the total institutional shareholding to 14.7%. At the end of 2016 the number has risen to 15.5%. Interestingly, S&P issuers experienced $23B in net outflows from international investors in 2016. The explanation for this seemingly contradictory pieces of data is found in the fact that significantly more issuers saw their shares outstanding decrease (mostly as a result of share buy-backs), than increase, in 2016. Proportionally speaking, buy-backs have resulted in a sharper decrease in the U.S. investor base over the foreign.
Read the full report: Despite Outflows, the Importance of International Investors Grows