247. The trends changing the world…and how to invest in them
The Invesco Global Focus fund has a refreshingly simple approach: understand the structural trends...
Adventurer Phileas Fogg famously set out around the world in 80 days in Jules Verne’s 1873 novel of the same name – and this has inspired us to take our own journey.
The original story charted the exploits of the fictional explorer as he attempted to circumnavigate the globe to win a bet with fellow members of the Reform Club. So, we thought we’d take a trip around the world in seven investment funds! While it doesn’t match Fogg’s itinerary exactly, it ensures you get to see the world.
The first stage of our trip takes us onto the continent. The Comgest Growth Europe ex-UK fund focuses on high-quality, long-term growth companies and may be suitable for investors with investment time horizons of at least five years.
Europe is home to many household name stocks and a quick look at this fund’s current largest holdings illustrates the point. Novo Nordisk, the multinational pharmaceutical firm, has the largest weighting of 7.8%, followed by ASML Holding, whose technology is used to make semiconductor chips*.
India is a fascinating country. Boasting a population of more than 1.2 billion people, it’s been enjoying rapid growth while integrating itself into the global economy. Alquity, a specialist emerging and frontier markets investor, insists the Alquity Indian Subcontinent fund provides an opportunity to tap into “the world’s most exciting” growth story.
The fund currently has just over a fifth of its assets in the software & services sector, while banks have an 18.6% allocation and household products account for 10.7%**. ICICI Bank has the largest stock weighting of 10.2%, followed by information technology firm Infosys on 9.4%, and TCS, another IT stock in third spot with 8.2%**.
We then continue our travels through this continent with Ninety One Asia Pacific Franchise.
This portfolio has a broad spread of exposures in terms of countries, sectors, and individual stock holdings, according to its most recent factsheet.
China has the most significant geographical allocation of 37.5%, followed by Australia’s 13.3% and 9.3% in Taiwan**. Other countries represented include South Korea, Hong Kong, and Vietnam**. The fund currently has 28 holdings, and its 10 largest positions include international heavyweights such as Taiwan Semiconductor Manufacturing Co and Samsung Electronics**.
Our next stop sees us arrive in Japan. This intriguing country has a remarkable culture, which manages to combine ancient traditions with the latest technology. The T. Rowe Price Japanese Equity fund, managed by Archibald Ciganer, benefits from the expertise of a Tokyo-based investment team.
These individuals search for companies that have a focus on growth and improvement. Those with sustainable growth and a durable competitive advantage are particularly favoured. The fund is best described as an actively managed, diversified all-cap portfolio which brings together between 60 and 80 of the team’s best ideas.
There’s a longer journey to our next destination but it’s one that’s packed full of world leading companies and entrepreneurial talent. The JPM US Equity Income fund invests exclusively in large US companies that are expected to pay, and have the ability to continue paying, attractive and growing dividends.
It embraces a fundamental stock selection process and targets firms with durable business models, consistent earnings, and strong cash flows. Unsurprisingly, its largest holdings include UnitedHealth, the healthcare and insurance company, as well as oil giant Exxon Mobil, and tobacco firm Philip Morris**.
Finally, we’re back home! The last stop-off on the trip returns us back to Blighty and the CT UK Extended Alpha fund, which is managed by Chris Kinder. The fund aims to increase the value of your investment over the long term and outperform the FTSE All-Share over rolling three-year periods, after the deduction of charges.
But it also has a little trick up its sleeve. As well as looking to benefit from ‘long’ positions – when the share prices increase – it can also make money when a stock performs badly.
This technique, known as shorting, enables the portfolio to theoretically benefit from both rising and falling share prices, which gives it a different look to many of its UK peers.
What can you do to enjoy international exposure – without having to replicate the type of adventure we’ve outlined? A possible solution is buying into one of the many global portfolios.
For example, the Invesco Global Focus fund invests only where its manager, Randall Dishmon, believes there is significant opportunity provided by sustainable, structural growth trends.
The US has the largest geographical weighting of 58.63%, followed by China, the Netherlands, France Switzerland, Denmark, and Spain**. This fund also gives exposure to some of the world’s largest companies, including Alphabet, the parent company of Google, social media giant Facebook, and Amazon, the online retailer**.
*Source: fund factsheet, 30 June 2022
**Source: fund factsheet, 31 May 2022