Which global equity funds are worth considering?

Global funds are hugely popular with UK investors. They currently have £152.3bn in the IA Global sector, according to the latest figures from the Investment Association*.

This is almost £14bn more than IA UK All Companies, which is in second place with £138.4bn*. IA North America comes in a distant third with £82.5bn of funds under management*. But not all global funds are the same – so which are worth considering?

Here we take a look at the sector and pick five funds that deserve your attention.

What you need to know about global funds

Funds in the IA Global sector are ideal for those wanting broad exposure as they must invest at least 80% of their assets in international equities.

However, choosing a fund is not easy. There is a vast array of portfolios to choose from and most will vary enormously in their objectives. For example, funds that focus on household name multinationals could sit alongside those that concentrate on developing markets.

Choosing the right fund for you

That’s why you need to do your research. Decide which parts of the world you’d like exposure to and then hunt for a fund that fits the bill.

To help in your search, we have selected five funds from within the IA Global sector, all of which have very different investment aims and objectives.

abrdn Global Smaller Companies

This fund, which was launched in early 2012, embraces the idea that smaller companies tend to outperform larger ones over the longer-term.

Manager Kirsty Desson maintains a diverse mix of country, sector and stock selections, using the company’s proprietary ‘Matrix’ screening tool. This scrutinises holdings on the basis of four key factors: quality, growth, momentum, and value. Generally, a 100-strong best ideas list is then whittled down to a 50-60 stock portfolio.

According to the most recent fund factsheet, information technology, industrials, and consumer discretionary are the three most prominent sectors**.

Morgan Stanley Global Brands

The investment philosophy of this fund is that high quality companies with dominant market positions can generate attractive long-term returns. The portfolio, which is run by a 10-strong team led up by William Lock, head of the international equity team, was launched back in October 2000. Its 10 largest holdings include household names such as tech giant Microsoft, cigarette manufacturer Philip Morris International, and payment company Visa**. In a recent fund update, it outlined the benefits of the companies it favours. “Big brands have the distinct advantage of having more cues to help keep and stimulate consumer attention than either small brands or private label/own label,” it stated.

Capital Group New Perspective

The flagship global equities strategy of Capital Group has a track record that goes back more than four decades. It invests in both early-stage businesses and established multinationals.

Its unique multiple manager approach involves nine portfolio managers, as well as a team of research analysts, contributing ideas. These stock suggestions, which currently include electric vehicle producer Tesla and pharmaceutical giant AstraZeneca**, are then blended together to create a diversified portfolio.

CT Responsible Global Equity

This fund invests in quality growth companies from across the world, with a focus on sustainability. There tends to be a bias towards medium-sized companies. Managers Jamie Jenkins and Nick Henderson will avoid companies with unsustainable business practices; but will invest in companies where there are problems that can be resolved. The constraints include no alcohol, gambling, pornography, weapons or tobacco, and the fund is fossil fuel free. There are also restrictions around environmental impact, animal welfare, human rights, and labour standards.

Invesco Global Focus

This is a high conviction, concentrated fund, which invests in structural growth winners. The philosophy behind the portfolio, which contains around 35 stocks, is to buy companies which are winning and then let them compound over time. Those with entrenched competitive advantages and attractive valuations are preferred. Top ten holdings currently include the likes of Facebook, Mastercard, Novo Nordisk and Sales Force**.

Research all Elite Rated global equity funds

*Source: Investment Association, September 2022
**Source: fund factsheet, 31 October 2022

 

Photo by Vladislav Klapin on Unsplash

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.