Largest Global Equity Funds
Orbis Global Equity is a Silver rated fund from Morningstar’s rated list of global equity funds. William Gray is the named manager on this fund but the investment process is heavily reliant on the work and support of the analyst team. The portfolio construction is based on a bottom-up approach with a value bias.
Veritas Global Focus is rated Gold by Morningstar and benefits from two experienced managers, Charles Richardson and Andrew Headley, who have been at the helm since launch in 2006. The fund's standout characteristic is the extent to which the managers aim to deliver real returns to investors. Indeed, preservation and growth of capital are considered to be of more importance than benchmark risk, and the portfolio is managed with little regard to an index. The managers use a thematic framework to help identify global industries that they believe will benefit from long-term structural drivers.
The increased importance of index funds is particularly noticeable on this list as Vanguard Global Stock Index and BlackRock ISF Developed World Index are the two largest offerings here. This may reflect the greater awareness of investors to the cost of investing in actively managed funds and hence becoming more attracted to low-cost options. Investors may also have lost patience with actively managed funds who, as a group, have found the heightened market volatility that has been evident in recent years to be a headwind to the achievement of consistent outperformance. While the combination of higher fees and weak performance may have disillusioned some investors, it could be worth considering whether having ever greater amounts of money following an index may reduce the efficiency of equity markets and create more opportunities for active managers.
Best Performing Global Equity Funds Over 3 Years
Fundsmith Equity Feeder is the Luxembourg-based feeder of Terry Smith’s Fundsmith Equity fund which he launched in November 2010 on the back of the success he achieved as an investment advisor to the Tullett Prebon pension fund. Smith is a well-known personality, having headed up a number of FTSE companies, and he is an original thinker often demonstrating his willingness to bet against the crowd. In many ways the fund is as characterised by what it won’t own as by what it will. The overriding philosophy is that Smith looks to invest in compoundable earners.
JOHCM Global Select has been run by Christopher Lees and Nudgem Richyal since launch in September 2008, giving investors continuity in management, particularly as the duo previously worked at Barings prior to joining J O Hambro.
The managers run a high conviction portfolio of around 50 stocks and are not afraid to deviate from the benchmark; as of the end of May 2015 the fund’s allocation to technology stood at around 32% compared with 14% for MSCI ACWI.
The Guinness Global Innovators fund is managed by Matthew Page and Ian Mortimer. This Ireland-based fund was launched in October 2014, however, there is a US-based strategy which dates back to December 1999 and whose track record has been taken into account here. The manager’s philosophy is based on the premise that innovative companies should create more value than their peers and therefore outperform over the long term.
This article originally appeared in International Adviser magazine
