There is a regularly quoted statistic about the high level of income companies listed on the FTSE which come from outside the UK. 

This is hardly surprising given globalisation, not to mention the number of Russian energy companies that are here now.

Capital Group has come up with a fascinating set of statistics that takes the discussion a lot further forward and questions how many of us invest. It has looked at a group of the major equity indices – it is entitled because it is the CI in MSCI – within the MSCI ACWI index.

US companies account for around half of the peer group, but only just over a quarter of all revenues generated by companies in the index came from the US. The same is true if you look at the DAX or CAC40, or at industry sectors within the MSCI ACWI.

As Capital’s Richard Carlyle says: “We live in an increasingly global world and, in this new world order, investors might need to change the way they view – and use – traditional stock market indices.”

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Capital has an approach it calls ‘the new geography of investing’, which is, as it implies, investing according to where a company derives its revenue and not where it is listed.

Using this concept, Capital asks: “Is Burberry really a British company?” It is listed on the LSE and has flagship stores in London’s West End, but from where does it gain its revenue? Only around a quarter is derived from UK shoppers, a little less from the US, 13% from Japan, and 33% from China and other emerging markets.

You could argue Burberry is a global company, in so far as its revenues are evenly spread across four major regions, or you could argue it is an emerging markets play.

One thing is sure – you cannot argue it is a British company, because if you told most ordinary investors you were investing in UK companies (without further explanation) they would understand that to mean companies that did most of their business in the UK.

In an era where the regulator is very concerned about investor outcomes, not fully understanding where companies derive revenue, or how that impacts on investors, seems unforgiveable.

One of the other fascinating statistics that comes out of Capital’s research is that in the FTSE 100 there are only seven companies that are truly British – that is, they derive virtually all of their revenue from the UK.

The seven, in case you are interested, are Wm Morrison, Sainsbury’s, Land Securities, British Land, Travis Perkins, Persimmon and Hargreaves Lansdown.

The geography of investing might not be a ‘new way’ of investing, but it is a lot smarter than buying an index product as a cheap proxy for exposure to an economy.

Lawrence Gosling is the founding editor of Investment Week. His views are his own, any comments to him at lawrencegosling1@gmail.com