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Five global funds for every investor

Global equities have seen a rebound in popularity in recent months. According to the Investment Association global funds in January 2024, attracted some £200 million in net retails sales* (the highest equity market) and a stark contrast to the £380 million outflows the sector saw in September 2023*.  

 

But choosing the right global equity fund is not easy. Nor is comparing the some 300 funds in the sector on a like-for-like basis possible: there are thousands of companies in which these funds could invest, so portfolios of anything from 30 to 200 stocks will naturally look very different. 


Five global funds for every investor

The benefits of a global approach 


1. Broader opportunities

The primary advantage of global funds lies in the expansive array of investment opportunities they provide. Fund managers have the flexibility to choose from companies worldwide, offering investors exposure to diverse markets and industries. 


2. Geographic diversification

Geographic diversification inherent in global funds mitigates risks associated with specific regions. If a particular market, such as the FTSE 100, experiences a downturn, global fund managers may be less susceptible to losses due to their diversified holdings. 


 3. Research intensity

Successful global funds demand robust research capabilities to analyse countries, markets, and potential holdings comprehensively. This ensures that fund managers can make informed decisions, ultimately benefiting the investors. 

 

Five global funds worth highlighting 

 

To help narrow down the choices, should you be considering investing yourself, we’ve selected five global equity funds demonstrating different characteristics which you may want to consider. 

 

For those looking to diversify away from large-caps: Baillie Gifford Global Discovery 

This fund, managed by Douglas Brodie, has the flexibility to search for those small and medium-sized companies which can become the large-caps of the future. The team targets less mature firms servicing global markets. The fund typically has a strong focus on innovation, resulting in a preference for healthcare and technology stocks. 

 

For those who like a growing dividend: M&G Global Dividend 

This fund offers welcome diversification for those investors concerned that they are over-reliant on UK companies for their dividend yield. Manager Stuart Rhodes’ invests across a wide range of geographies, sectors and size of company. The fund has around 40 stocks, typically held for three years. Almost half (44.8%**) of the portfolio is currently held in US equities. 

 

For capital preservation: JOHCM Global Opportunities 

This fund has capital preservation at the heart of its investment process. It typically consists of 30-40 stocks but is well diversified in terms of both geography and sector. The managers screen out companies with the biggest causes of capital destruction; weak franchises, over-geared balance sheets and over-valued assets. They then focus their research on high quality, high return on capital businesses. 

 

For sector-specific exposure: First State Global Listed Infrastructure 

This fund invests in ‘hard’ infrastructure such as bridges and ports around the world, via listed companies that own the assets. Of around 180 companies that the team has identified and monitor, 41 are currently included in the portfolio***. It currently has a focus on electric utilities (37%) and highways & rail tracks (17%) and overweight to the United States (60%)***. 

 

For sustainable investors: JPM Climate Change Solutions 

This fund focuses on investing in companies actively developing solutions to combat climate change. Operating as a high-conviction thematic portfolio, this fund isn’t bound by index limitations. The largest region allocation is Europe & Middle East ex UK at 43.8%, followed by North America at 41%**. Its primary objectives revolve around addressing key themes such as renewables & electrification, sustainable transportation, viable food & water practices, eco-friendly construction and recycling & re-utilisation. 

 

*Source: Investment Association, January 2024 

**Source: fund factsheet, 31 January 2024 

***Source: fund factsheet, 31 December 2023 

 

Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. The views expressed are those of the author and fund managers and do not constitute financial advice. 


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