Domicile has long been an investor's only way of geographically diversifying a portfolio, but that gives a misleading impression of the actual diversity of a portfolio. Large multinational companies have global revenue streams, as do lesser-known companies whose revenue exposures can be surprising. Consider Millicom International Cellular (TIGO). MSCI regards it as a Swedish business, whereas Morningstar assigns it a U.S. domicile. Incorporated and headquartered in Luxembourg, Millicom International Cellular formed in 1990 when the international operations of Swedish mobile-telephone firm Tele2 combined with those of U.S.-based Millicom. Reflective of that history, Millicom International Cellular's primary exchange is the Swedish NASDAQ OMX STOCKHOLM AB, and it maintains a corporate office in the United States.
Neither domicile designation does justice to the economic drivers behind Millicom International Cellular's current business, however. It is focused on Latin America and Africa. As of fiscal 2017, the firm got more than 85% of its total revenue from Colombia, Paraguay, Bolivia, El Salvador, and Costa Rica, with most of the rest coming from Tanzania and Chad. Viewing such companies through the lens of revenue offers a significant advance over domicile.
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Alec Lucas does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.