280. Seven fund managers, just ten minutes, what would you ask them?
In this special bonus episode to mark ‘International Podcast Day’, the focus is on a unique event -...
With inflation starting to look like it’s getting out of control, central banks raising interest rates, consumers facing a cost-of-living crisis, war in Europe and geopolitical tensions in other areas of the world, the future continues to be uncertain.
And if there is one thing stock markets don’t like, it’s uncertainty.
A quick look at performance charts shows that the US stock market is down 17% year to date, Europe is down 14%, Japan down 2.4% and emerging markets down 13.5%*. In fact, out of a list of 19 stock markets from around the world, just the UK and Brazil are clinging on to positive returns with 0.9% and 0.6% respectively*.
But after such large falls, investors start to ask: is now the time to invest? Company share prices are cheaper now than they were a year ago, so opportunities are starting to appear.
So is now the time to put more money into the UK, which has proved to be resilient in recent months? Or is the US a better bet as its stock market has fallen so much more?
One option, of course, is not to make that decision but instead to let a global equity manager do that for you. Why limit yourself to one area of the globe when there are opportunities all over the world?
Here, we highlight six very different global equity funds that could appeal.
The investment team behind this fund has a mantra: ‘don’t lose money’, which will possibly be as comforting to investors as the familiar names that can be found in the portfolio. The team, which operates as a boutique within Morgan Stanley, looks for high quality companies with defendable and visible future earnings, allowing them to give attractive returns to shareholders and reinvest in their business to stay ahead.
Run by a four-strong team, this offering looks for companies that have an edge in their respective business sectors. It can invest in any business around the world, but because the managers are looking for industry leaders, there is a natural bias towards larger-sized companies. The fund is also differentiated by the managers’ systematic approach to portfolio construction, which means that behavioural biases should be removed.
This fund uses a thematic approach to identify the key structural growth trends that will shape the global economy of the future across a portfolio of 40-60 stocks. Three mega trends have been identified, with strong and dependable growth prospects. These are: better resource efficiency (cleaner), improved health (healthier), and greater safety and resilience (safer).
While this fund may be new, the team – led by Nick Clay – is highly experienced, and the investment strategy is well-proven. It has a true contrarian nature backed up by a logical and disciplined philosophy. This leads to an attractively yielding income fund (every holding must yield at least 25% more than the broader market at the point of purchase) that also allows for capital return from a concentrated portfolio.
This is a quality growth fund that invests in high return on capital businesses experiencing sustainable structural growth. It has a 130/30 structure, which allows the manager Neil Robson to extend investors’ potential returns by buying stocks he expects to do well and also looking to make money on stocks he expects to do badly (shorting). Neil describes this as “lining up on the starting grid for a motor race with an engine 50% bigger than everyone else’s”.
ASI Global Smaller Companies is a textbook fund from the abrdn equities team. Based around the powerful screening tool ‘Matrix’, which co-manager Harry Nimmo helped create, it identifies smaller companies from all around the globe – including emerging markets – that the team believes have the best growth prospects. The portfolio is concentrated in 50-60 names.
*Source: T. Rowe Price, market dashboard, 10 June 2022