After a period marked by financial markets’ preoccupation with detailed inflation data and central bank decision-making, the final two months of 2023 provided a glimpse into the potential for a different trajectory in the year ahead. During this time, markets experienced a rally, and leadership diversified away from a narrow range of AI-related companies. This shift is welcome, suggesting a greater appetite for a broader range of investment themes in the coming year.
The global stock market boasts over 41,000 listed stocks, creating a vast opportunity for active fund managers. There is also a huge range of exciting themes, including developments in healthcare disruption in financial services, alongside familiar favorites such as AI or big data. For the skilled investor, there is real value in navigating these markets effectively.
In this context, we examine six distinct funds specializing in global equities, each offering a unique approach and something different for your portfolio.
1. Smaller Companies
The Global Smaller Companies investment trust invests in smaller companies worldwide. Managers Peter Ewins and Nish Patel believe that these businesses experience superior growth over the long term compared with larger companies, and their goal is to go where other equity researchers won’t, finding hidden gems at attractive prices. This trust is one of the oldest in the market and has also successfully produced 50 years of dividend growth for investors.
2. Mid-Cap Opportunities
The abrdn SICAV Global Mid Cap Equity fund is run by abrdn’s successful small and mid-cap desk and targets the ‘next 15%’ market cap size up from smaller companies. The process is based around abrdn’s powerful screening tool ‘Matrix’, which industry veteran Harry Nimmo (now retired from the trust) helped create. abrdn already has an excellent small-cap product, and this fund captures the ‘graduates’ from there and new ideas.
3. A Sustainable Future
The CT Responsible Global Equity fund invests in quality growth companies from across the world, with a focus on sustainability. Managers Jamie Jenkins and Nick Henderson are stock-pickers with a long-term approach. What makes this fund stand out from the crowd is the strength of the responsible investing team: it is a separate unit providing independent, bespoke analysis.
4. Dividend Income
The JPM Global Equity Income fund is value-oriented and pursues global investments, encompassing emerging markets, particularly large to mega-cap stocks. Helge Skibeli, Sam Witherow, and Michael Rossi, the fund managers, strive to attain a robust yield while focusing on growth. Leveraging the support of an extensive global team of analysts, they meticulously sift through the entire global market to curate a portfolio consisting of 40-90 stocks.
5. Avoiding Behavioral Bias
The Lazard Global Equity Franchise fund looks for companies with an edge in their respective business sectors. It is differentiated by the managers’ systematic approach to portfolio construction, which means that behavioral biases should be managed effectively. As a result, the portfolio looks very different from many peers, with none of the large tech companies present in the top ten holdings*.
6. Multi-Manager Approach
Sitting in the IA Flexible sector, the Jupiter Merlin Growth fund is run by one of the most respected teams in London. Most of the portfolio is concentrated in the top five fund holdings, although the fund remains highly diversified on a ‘look-through’ basis to individual stocks. The team has a simple process and focuses on fund managers who have shown themselves resilient in tough times. It currently has 50% invested in global equity funds, 24% in UK equity funds, 12% in US equity funds, and 12% in Japanese equity funds**.
*Source: fund factsheet, 31 October 2023
**Source: fund factsheet, 30 November 2023
Past performance is not a reliable guide to future returns. You may not get back the amount initially invested, and tax rules can change over time. This article does not constitute financial advice.
