Are global equity funds the must-have investment for 2019?

Global equities have had a resurgence in popularity in recent months. According to the Investment Association, global funds were the best-selling sector in March 2019, attracting some £691 million in net retail sales* – the highest amount on record and a stark contrast to regional sectors were every continent bar Japan, experienced outflows.

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.

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 (48.5%**) of the portfolio is currently held in US equities.

For capital preservation: JOHCM Global Opportunities

Managed by Ben Leyland and Robert Lancastle, 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, 40 are included in the portfolio. It currently has a focus on electric utilities (23.6%**) and highways & rail tracks (14.5%**).

For value investors: Schroder Global Recovery

While growth investing has been in the box-seat for some time, a shift towards value may mean this fund could be well-positioned to capture strong returns. The portfolio typically holds around 50 names from different parts of the globe. The managers typically do not meet company management as they feel all the information should be in the financial statements. Over half the fund (55.9%**) is currently invested in Europe.

* Source: Investment Association, Savers remain cautious as net retail outflows ease, 7 March 2019
**Source: Fund fact sheet, 31 March 2019

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.