Global equities: The heart of your portfolio

According to the Investors Chronicle, a magazine for individual investors, a global equity fund should be at the “heart of pretty much every investor’s portfolio”. So how importantly do institutional investors consider these allocations?

A quick poll of the Lens’s colleagues at CAMRADATA suggests global equities remain the backbone of investment allocations for asset owners. One member of the team thinks as much as 90% of them are invested in these strategies in recognition of the vast hunting-ground for shares they provide.

The asset-class sector can act either as a central plank for larger portfolios that would mix in specialist funds, or for smaller schemes and start-up portfolios global equities could form a ‘one-stop shop’ for all core stock market holdings.

Global equities offer an opportunity to target faster growing regions than what might be available locally in the UK and Europe, and in addition to generating returns, from a risk perspective the asset manager Vanguard has reported that volatility can be reduced by 40-50% with an allocation to global equities outside of one’s domestic market.  

As the global equity markets rallied in the first months of 2019, investing in equities in general and specifically global equities has presented opportunities.  Indeed, according to Citywire Discovery data, global equities recently attracted the most money ever among managers that Citywire tracks. 

The numbers are healthy. But in order to remain so, our CAMRADATA experts consider that the sector will need to show more innovation and new approaches if managers are to distinguish themselves. And, of course, the US-China trade tariffs are a crucial consideration.

*For more on these issues, keep an eye out for CAMRADATA’s Global Equity roundtable taking place in October.