Identifying the best Commonwealth investments

Sam Slator 12/04/2018 in Global

Some 71 nations and territories – representing one-third of the world’s population – are in the throes of competing in the Commonwealth games on Australia’s Gold Coast. And, with the games airing on our TV screens each morning, it serves as a reminder of how richly diverse the world really is.

From an investment perspective, it also serves as a reminder that there is a huge range of regional equities to choose from, all boasting their individual merits and potential risks.

But are the countries winning the most gold medals at the moment also being awarded a top spot in our Elite Rated funds’ portfolios? We take a look at the top five:


Currently in the top spot of the Commonwealth league table, Australia is favoured by a number of the managers of our Elite Rated funds. For instance, Jason Pidcock – who heads up Jupiter Asian Income – has allocated 23.7% of his portfolio to Australian equities, which makes it his largest regional weighting.

The fund aims to capitalise on the opportunities of today, as well as the potential of tomorrow, and Jason is not afraid to hold much more or less of certain countries than the benchmark in pursuit of this aim. The higher weighting to developed markets such as Australia make it a relatively defensive Asia Pacific option.

Schroder Asian Income and Stewart Investors Asia Pacific Leaders also have sizeable allocations of 15.5% and 7.5% respectively. National Australia Bank features in the Schroder fund’s top ten, while biotech company CSL Limited is Stewart Investors Asia Pacific Leaders’ sixth largest holding representing 4.2% of the fund.

The UK

England is in second place (with Scotland, Wales and Northern Ireland in seventh, eighth and nineteenth place respectively) – on the Commonwealth medal league table.

Two examples of Elite Rated global funds with high conviction in UK equities are Guinness Global Equity Income at 21% and Baillie Gifford Global Discovery at 18.5%. The former, which is headed up by Matthew Page and Ian Mortimer, has an equally-weighted portfolio of 35 stocks which are repositioned on a ‘one-in, one-out’ basis. The latter looks for hidden gems further down the cap spectrum for high-growth opportunities.

Closer to home, Jupiter European Opportunities Trust – which is pan-European – has a 25% weighting to UK equities. Managed by Alexander Darwall, it is completely unconstrained and can invest anywhere across Europe. Alexander prioritises finding companies with proven business models, honest management teams and business plans which offer sustainable long-term growth.


India is currently in third place. It is also popular among investors (us included) for its favourable demographics, increasingly shareholder-friendly policies and its fast-growing economy.

In terms of Elite Rated emerging market funds, MI Somerset Emerging Markets Dividend Growth and Magna Emerging Markets Dividend both have sizeable allocations at 9.22% and 8.8% respectively. MI Somerset Emerging Markets Dividend Growth’s largest Indian constituent is IT services company HCL Technologies, while Magna Emerging Markets Dividend’s largest Indian stock allocation is to mortgage lender Indiabulls Housing Finance.

For those who want concentrated Indian exposure, there is of course Goldman Sachs India Equity Portfolio, which is run locally from India by Hiren Dasani.


In fourth place is Canada. BlackRock Gold & General, which invests in gold and precious metal shares, holds a hefty 49% allocation to the country because of its abundance of precious metal mines.

Another specialist fund to hold a significant chunk of its portfolio – 7.68% – in Canadian holdings is Polar Capital Global Insurance, which invests specifically in risk and casualty insurance stocks from around the world.

For those seeking income, M&G Global Dividend has a reasonable 8% in Canadian equities, with oilfield service company Gibson Energy the portfolio’s second-largest overall holding.

South Africa

South Africa is in fifth place in the medal table. The aforementioned Guinness Global Equity Income fund has a 3.6% exposure to the South African equity market through its largest individual holding – telecom company Vodacom Group.

Economic growth in the country has been dismal since the global financial crisis as it has been mired in economic and political mismanagement. But the Guinness managers said recently: “There is a gathering bull case for South African equities based upon the recent leadership change, falling inflation, low household debt and the potential for interest rate cuts. The issues of inequality, poor education and skills with sky-high unemployment amongst the young are all deeply embedded, however, so you can’t simply take a broadbrush approach and invest blindly in the index. You need to focus on specific business attributes in the form of long-term profitability and a demonstrable track record in making money even in the toughest conditions.”

Elite Rated M&G Global Emerging Markets fund has a 10.3% weighting to South African equities, which is a 3.3% overweight relative to its MSCI Emerging Markets index. Barclays Africa Group is a top ten holding.

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.