Opportunities in startup countries are increasing

According to Ben Laidler, a global market strategist at eToro, the smallest nations in the world are the source of some of the most innovative companies and the best returns on investment, but they are often overlooked.

"Out of 195 countries, only 5 represent 75 percent of the value of global capital markets. Small and open economies are often forced to be innovative and flexible. They have benefited from the new economy's focus less and less on natural resources and more on knowledge. The Startup Countries index compares the top five countries in terms of startup-friendliness, economic competitiveness, and ease of doing business. Their GDP growth is 70 percent above the world average of the past 20 years. Their capital markets were exceeding expectations, even though even this figure is understated as most of their innovative companies are often only listed on foreign stock exchanges," Laidler analyzed.

"That way, we were able to create an index of consistently top-rated small countries with a population of no less than 10 million. Sweden, Israel, Denmark, Estonia, and Singapore are our Startup Five. We could also add Ireland, Switzerland, Hong Kong, or New Zealand. We compare straight-weighted an index of their local equity markets with global equities and they consistently outperform the average," an eToro representative added.

In his opinion, the market performance of these countries is often even better than you might think. As their capital markets are generally quite small, the newest and most innovative companies are often listed on the US or UK stock exchanges, such as Sweden's Spotify (SPOT) and Oatly (OTLY), Singapore Sea (SE), and Flex (FLEX), Israeli Monday.com (MNDY) and SentinelOne (S.US), Danish Just Eat (TKWY.NV) and Zendesk (ZEN), and Estonian Playtech (PTEC.L) and Wise (WISE.L).

(WBJ)