Capital preservation, quality companies and investors fear of missing out
Ben Leyland, manger of JOHCM Global Opportunities, sits down with research analyst James Yardley to...
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:
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.
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.
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.
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%**).
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