In its monthly Perspectives article titled How global are you?, Morphic Asset Management said that the MSCI World Index only includes a relative "handful" of the world's stock markets.
"We'd hazard a guess that most investors don’t know that not only are Brazil and China excluded from their funds, but so are South Korea, Taiwan and many other countries that most people would consider to be part of where their manager looks to find them stocks for their 'global equities' portfolio."
When the MSCI World Index was created in 1986, global investing was realistically limited to a handful of countries in Western Europe, the US and Japan, said Morphic AM.
"Globalisation, and 30 years of economic development, have made this arbitrary decision far less relevant.
"To say Taiwan with its income per capita near Australia and home to some of the largest technology companies in the world, should be analysed separately to US technology stocks seems odd, maybe even quaint, in 2015," Morphic AM said.
Indeed, a newer “All Country World Index”, one that Morphic follows, gives a better representation of global opportunities.
A truly "global investor" should be able to invest in outstanding companies wherever they may be, said Morphic AM.
"The majority of the products sold to Australian investors are benchmarked against the old MSCI World Index.
"So investors who are going into 'global equities' in Australia are only getting stocks in certain parts of the world rather than a true global product," said Morphic AM.
