Global funds are likely to form the core of most people’s portfolios. There are some old favourites that have been doing a good, steady job for investors for many years. However, as the world changes, it might be worth introducing some new options.
While global funds can, in theory, go anywhere, more recently, the most successful have been focused on the US, and the mega-cap technology companies in particular. Fund managers that have leaned in to the technology trend have, by and large, dominated the top of the performance tables, while other global funds have struggled to keep pace.
Rathbone Global Opportunities has been one of the most successful funds over the past decade. Manager James Thomson has selectively invested in most of the Magnificent Seven, but today only has Microsoft and Nvidia in his top ten*. Technology is still one of his largest sector weightings, at 18.5%, but he also has significant weights in the consumer discretionary sector and industrials*.
“We believe businesses have to offer something that others can’t match – a star quality. They must be easy to understand, different to their competitors, durable to change and difficult to imitate,” he says. The portfolio remains predominantly invested in US companies – 71%* – though most of them are global in nature.
The IFSL Evenlode Global Equity fund has been a popular counterweight to growth-focused funds such as the Rathbones fund, or even to a US index fund. Its weighting in the US is lower, at 50%, while its main sector weights are in financials, industrials and consumer staples. Mastercard is its largest holding. It holds Amazon and Alphabet in its top 10 positions, but technology is only 4.7% of the fund*. Managers Chris Elliott and James Knoedler prioritise companies with high returns on capital and strong free cash-flow, and aim to ensure that the companies’ underlying revenues are geographically diverse. They also tend to focus on larger companies.
The Lazard Global Equity Franchise fund has been another steady choice for the long term. It looks for long-term, defensive returns by investing globally in a range of franchise companies. Rare for a global equity fund, it is overweight utilities, which make up 21% of the fund*. This includes companies such as National Grid. It also has a significant overweight position in the UK. The UK is just 3.6% of the MSCI World, but over 20% of the Lazard fund. The US weighting is 33.7%, around half that of the index*.
Unsurprisingly, given the nature of its investments, the fund has lagged the broader MSCI World index in recent years. However, it has shown itself adept at minimising losses during periods of market dislocation. For example, it delivered a positive performance in 2022, at a dismal moment for the wider stock market*. It tends to zig while other funds are zagging, which has also made it a popular choice to sit alongside more technology-focused growth funds.
No matter what the tech bros would have you believe, innovation is not confined to Silicon Valley, nor to a handful of mega-caps. The IFSL Marlborough Global Innovation fund aims to find innovative companies at an early stage in their growth. The fund incorporates long-term themes such as the digitisation of media, cybersecurity, digital payments, water conservation, automation, and radio frequency technology.
The fund is £38m in size, and has its highest weightings in UK (23%) and US (40%) with 55% of the portfolio exposed to technology companies**. Now the shine has come off the mega caps, investors may start to look more closely at other areas of growth, and the type of smaller companies this fund holds will finally get a moment in the spotlight.
Ranmore Global Equity is another under-the-radar option. Run by Sean Peche with a strong value style, it has nevertheless beaten many of its growth peers in recent years. He likes all the usual company characteristics, such as strong return on capital, good balance sheets and the potential for long-term growth, but also wants to see an attractive valuation. Rather than meeting management, he judges the leadership team on its historic performance. Importantly, Sean’s natural caution on well-liked or overhyped investments has steered him away from the US market, where only around 15% of the fund is invested***.
The fund has grown to £456m, but we believe it deserves more attention from investors. It looks very different to most other global funds. In particular, it is genuinely global, with significant weightings in Europe (37%), China (17%) and Japan (11%)***. Its top holdings are eclectic and Sean is happy to invest wherever he finds value.
The Martin Currie Global Portfolio Trust is a relative minnow, at £221m*. Managed by Zehrid Osmani, head of the global long-term unconstrained team at Martin Currie, it focuses on 25-40 companies, many of which will be plugged in to long-term themes such as the future of technology, resource scarcity or demographic changes. It is likely to look significantly different to the benchmark, the MSCI All Country World Index. It also scores well on price, with an ongoing charge of 0.64%*.
It holds a few of the mega-caps. Nvidia and Microsoft are its two largest holdings, for example, but it matches this with companies such as Ferrari, Atlas Copco and Moncler*. The US is roughly half of the fund’s holdings, with France, Italy and the Netherlands also well-represented*.
Investors can stick with what they know, or take a chance on a new option. All these funds should serve investors well, although each will have its own performance trajectory. Exploring some unfamiliar global funds may provide more defence against volatile markets.
*Source: fund factsheet, 28 February 2025
**Source: fund factsheet, March 2025
***Source: fund factsheet, December 2024
