These two countries are the most investor-friendly markets in the world

India and the US are the two most investor-friendly markets in the world, according to a global study by Morningstar Inc. The study says both countries follow best practices for portfolio disclosure.

The two countries earned top grades for their robust disclosure regimes across six categories including fees, transparency of fund holdings and issues such as conflicts of interest. The report covering 26 markets across North America, Europe, Asia and Africa singled out Australia as a notable laggard.

“The US has consistently led the pack in this area, while India has gradually added global best practices to its disclosure framework,” Christina West, director of manager research services at Morningstar and co-author of the study, said in a statement. “India has also set a high standard with monthly required portfolio holdings disclosure.”

Morningstar applied a grading scale of top, above average, average, below average, and bottom to evaluate 26 markets based on six disclosure criteria: easy to understand prospectuses, fees, portfolio holdings, portfolio manager and compensation disclosures, and for the first time ESG(Environmental, Social and Governance) and stewardship, and sales disclosures.

Belgium, Italy, Japan, Singapore and Switzerland were ranked below average, while Canada, Korea, South Africa, Sweden, Taiwan and Thailand were ranked above average.

Among the countries, Australia ranks at the bottom. According to the report Australia doesn’t follow the practice of regulated portfolio holdings disclosure, despite being a sophisticated market. The nation has also yet to adapt to increasing investor expectations around ESG and stewardship disclosures, it said.

Most fund managers in Australia publish their top 10 holdings on their websites, but it’s difficult to get the entire portfolio breakdown, said Grant Kennaway, director of manager research for Australia at Morningstar and one of the report’s co-authors. In India, fund managers publish full portfolio allocations and what percentage is invested in them, he said.