Constraints on choice within the domestic market where four stocks account for more than 60 per cent of the ISEQ, coupled with a lack of liquidity in many second-liners, provides a compelling argument for international equities. However, investing in overseas companies has remained a muted philosophy for many Irish investors. The preferred strategy has generally been to maintain a domestic orientation, based most likely on the premise that you are better off purchasing companies of a familiar nature. Indeed, as many market participants assume the dual role of consumer and shareholder, it is hardly surprising that companies such as AIB, Smurfit and Ryanair remain popular Sharetrack choices.

Nevertheless, a blinkered domestic approach may cost Sharetrack investors dearly.

As international and domestic investment markets do not move in tandem, overseas exposure can substantially enhance performance while, at the same time, reducing the overall volatility of a portfolio.

As a case in point, since the start of the competition the Irish market has fallen approximately 10 per cent, in stark contrast to all major international markets which remain in solid positive territory.

By ignoring the international arena, you eliminate the attractions of many "hot" sectors not readily available in the Irish market.

For example, the US is the obvious home for Sharetrack participants who want to capitalise on high growth technology stocks such as Oracle and Microsoft. British investments such as Shell or BP Amoco provide the opportunity to capitalise on any oil price volatility, while the euro zone offers the security of consumer staples such as Nestle and Heineken.

Even where one can successfully source attractive domestic representatives, such as Esat in telecommunications, they are somewhat overshadowed by the lure of more global players such as Cable & Wireless or MCI Worldcom.

Constantly improving communication technologies renders information on worldwide economies and companies readily accessible.

As foreign holdings such as Vodafone, Philips, Blue Circle Industries and HSBC Holdings rank among the top performers to date, Sharetrack participants should recognise the benefits of global exposure and consider reducing their dependence on the familiar domestic scene.

Goodbody acts as broker to AIB Group.

Mark Donnelly is a portfolio manager in the private client department of Goodbody Stockbrokers.