We are living in unstable times. Geopolitical tensions, economic problems, rapid technological developments, climate change and political unrest are causing widespread volatility.
So, where should investors seeking international exposure focus their attention if they don’t want to buy a collection of individual country portfolios? Here we spotlight six global funds for an uncertain world that meet the needs of various investors, from the more cautious to those keen to embrace higher risk.
Please remember that the value of investments will fluctuate and returns may be less than the amount originally invested. Tax treatment depends on your individual circumstances and tax rules can change. Chelsea does not offer advice and so if you are unsure of anything please contact an expert adviser.
Jupiter Merian Global Equity Absolute Return
This diversified portfolio suits more cautious investors. It’s a long/short fund, meaning it can make money when stock prices both rise and fall. The fund, which is co-managed by a team of six, has historically had a low correlation with global equity markets. It’s also been less volatile.
Potential holdings are examined based on valuations, sustainable growth, analyst sentiment, company management, and factors that could affect the share price. We believe the combination of low correlation to equity markets and strong returns is a rare and valuable commodity. The team has also recovered from a period of underperformance between 2018 and 2020 — the fund’s only negative performance period in the past 10 years*. Over the past calendar year, the fund has delivered returns of more than 16% to investors*.
Pinnacle Life Cycle Global Equity Select
This is a core global equity fund that invests in all types of businesses, while limiting its exposure to broad style, sector and geographic risks. Its three co-managers consider businesses at different stages of the corporate life cycle: accelerating, compounding, fading, mature and turnaround. These stocks will be judged on the fundamentals relevant to each stage – and then ranked using the firm’s Shareholder Wealth Creation screening tool. The end result is a list of 250 stocks – down from an initial universe of 5,000 – which is then further whittled to a holding list of 25-45 holdings. In an update earlier this year, the managers acknowledged various outcomes could result from what they see as a period characterised by volatility and change.
Ninety One Global Environment
It’s a concentrated global equities fund but with a difference: it only invests in companies contributing to the decarbonisation of the world economy. This makes it attractive to ESG-focused, climate-conscious investors who want to make money while also having a positive environmental impact.
The fund’s co-managers, Deirdre Cooper and Graeme Baker, have complete conviction in their holdings. It’s why the fund will only have 20 to 40 positions. Another benefit of investing in this portfolio is the tailwind from an estimated $2.4 trillion per year being spent worldwide to meet global temperature goals**. Currently, almost 45% of assets are from the industrials sector, while information technology, utilities and materials are among the other areas represented***.
Fidelity Global Special Situations
Fidelity’s large team of analysts helps the fund’s managers select companies that are unique, undergoing corporate changes, or offering exceptional value. The upshot is a blended portfolio that managers Christine Baalham and Tom Record believe can deliver consistently through all market conditions. It’s also very well diversified with up to 150 holdings. This limits the impact of any one stock on the fund’s performance and suggests the portfolio works well as a core holding.
The fund will usually have a high allocation towards larger companies. Currently, this includes Alphabet (parent of Google), Microsoft, Amazon and Samsung Electronics. It’s also geographically diversified. While the US accounts for a substantial 57%, it has exposure to a long list of countries, including the Netherlands, UK, Japan, South Korea, Taiwan and Germany***.
WS Montanaro Global Select
This unconstrained quality growth fund backs tomorrow’s global leaders by searching for the best small and mid-cap companies. The concept is that smaller companies are typically less researched. This means they offer greater upside potential than their larger global counterparts.
Profitable businesses with growth potential and sustainable competitive advantages will be favoured by the fund’s management team. George Cooke, its lead manager, is very experienced and has an impressive track record of delivering strong returns from both small and mid-cap names. Sartorius Stedim Biotech, a French company that provides innovative equipment for the biopharmaceutical industry, is currently its largest position***.
CT Global Extended Alpha
Investors favouring a more satellite approach to global investing, rather than a core holding, might consider this fund, managed by Neil Robson. This is a quality growth fund that buys high-return-on-capital businesses that are experiencing sustainable structural growth. It has a 130/30 structure, which allows it to enhance investors’ potential returns by buying stocks it expects to do well and profiting from those it expects to underperform.
The fund is also pretty well diversified with around 70 ‘long’ positions, including giants NVIDIA and Microsoft, as well as 25 ‘short’ holdings***. In a recent update, Neil suggested that companies with strong fundamentals that had weathered the challenging operating environment of the past few years were likely to outperform****.
