Dimensional’s Matrix Book is an annual review of global returns that highlight the power of compound investing. It’s a fascinating document: you can look up the compounded growth rate of the S&P 500 for every year going back to 1926.
Buried on page 74 is a chapter on “World Equity Market Capitalization,” listing the market capitalization of most of the world, country by country. No surprise, the U.S. is the global leader in stock market value. The $40 trillion in stock market wealth in the U.S. is almost 60% of the value of all the equities in the world.
Global market capitalization, by country
(in trillions, with % of global share)
- U.S. $40 trillion (59%)
- Japan $4.1t (6%)
- United Kingdom $2.6t (4%)
- China $2.5t (4%)
- Canada $2.1t (3%)
- France $1.8t (3%)
- Switzerland $1.6t (2%)
- India $1.4t (2%)
- Australia $1.4t (2%)
- Germany $1.3t (2%)
Source: Dimensional Funds, 2023 Matrix Book
Here’s where it gets fun. My friend Ben Carlson pointed out that Apple’s current market capitalization of about $2.7 trillion this week exceeds the entire market capitalization of the United Kingdom, the third biggest stock market in the world.
Apple vs. the world
(market capitalization)
- Apple: $2.7 trillion
- UK : $2.6t (595 companies)
- France: $1.8t (235 companies)
- India: $1.4t (1,242 companies)
- Germany: $1.3t (255 companies)
Source: Dimensional Funds, 2023 Matrix Book
Not only is Apple bigger than all 595 companies that list in the United Kingdom, it’s bigger than all the companies in France (235 companies), and India (1,242 companies).
Apple is twice the size of Germany’s entire stock market, with 255 companies.
In part, this reflects the extreme values that are being given to companies that are: 1) successful, and 2) growth-oriented.
That orientation toward tech and growth can influence the character of a country’s market.
Germany, for example, is by far the largest country in Europe by GDP, yet its stock market is smaller than the U.K, France and Italy. In part this reflects the fact that there are fewer companies listed than the U.K., but also because Germany has more value-oriented companies. As a result, its market multiple — the price investors pay for a dollar or a euro’s worth of profit — is considerably lower than that of the U.S.
Regardless: Apple is bigger than the entire U.K. stock market? Twice as big as all of Germany? That is amazing.