The major determinants of Australia''s geographical allocation of portfolio investment indicate a broad correspondence between stock market capitalisation of destination countries and the allocation of Australian financial investments but with some deviations from that baseline, where the deviations are correlated with Australian trade patterns. Research provides answers to some of the following questions; i. why does the pattern of Australia''s capital flows not match that of its trade flows; ii. which bilateral factors are responsible for explaining Australia''s portfolio equity investment holdings; iii. are cultural, informational factors important in explaining Australia''s portfolio allocations; iv. how do regulatory and legal variables affect equity portfolio holdings.