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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.
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.
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.
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**.
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.
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.
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.
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
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