Why have Australian shares underperformed global shares? Will it continue?
> The underperformance of Australian versus global shares since 2009 reflects a combination of tighter monetary policy, the strong $A into 2011, the slump in commodity prices, property crash phobia and classic mean reversion.
> High dividend payouts are not to blame. In fact, Australia’s performance is not quite as bad once dividends are allowed for.
> It’s too early to say the underperformance by Australian shares is over, but some of the drivers may be waning.