The 10 global funds I’d happily put in my pension, by JEFF PRESTRIDGE: Our money guru reveals the investments set to thrive in the years ahead – that could make you wealthier

Having revealed seven days ago half of my ‘top 20’ investment funds, it is time to divulge the remaining ten. 

Investment winners in the past – and, hopefully, funds that will thrive in the years ahead, enhancing your wealth in the process. 

This time around, I have selected my favourite overseas investments – last week’s picks were funds and stock market-listed trusts which invest in UK and European markets.

The choices are all drawn from the investment manager interviews I have conducted over the past 25 years for Wealth’s popular Fund Focus section. They are funds underpinned by having good fund managers at the helm which have delivered on their promises to investors.

They are a mix of growth and income-orientated funds, so there should be something there for you which tickles your investment fancy. 

You may ask why there are no North American funds among them but my preference is for global funds that have a chunk of their assets in US (and Canadian) stocks. 

These are more suggestions than recommendations – but for the record, most feature in my collection of pensions, Isas and investment portfolios.

If you hold funds that have served you splendidly – but have not made it into my ‘top 20’ – do let me know at jeff.prestridge@mailonsunday.co.uk. 

And if you can, keep building your long-term wealth. With the current motley crowd governing us, we have no idea what’s around the corner.

1 ALLIANCE WITAN

Alliance Witan is one of the country’s largest investment trusts with a portfolio valued at £4.8billion. It’s a constituent of the FTSE 100 Index and only trusts 3i, Scottish Mortgage (run

by Baillie Gifford) and F&C (managed by Columbia Threadneedle) are larger.

Although its size is a comfort blanket for investors, it’s the way the trust is managed that stands it apart from rivals.

Its portfolio is parcelled out to external investment houses to manage, most running 20-stock mini-portfolios and each bringing something different to the Alliance Witan party in terms of investment style or specialism.

The managers are chosen (and fired) by financial consultants

Willis Towers Watson and are drawn from all four corners of the globe. The resulting combined portfolio comprises more than 230 stocks with nearly 60 per cent of the holdings listed in the US. While five of tech’s ‘Magnificent Seven’ stocks are among the trust’s top 20 holdings – Tesla and Apple are absentees – Willis keeps a lid on the exposure by capping individual stock positions at 5 per cent.

When I looked at Alliance in late October 2018 (it became Alliance Witan in October last year after it consumed rival trust Witan), Willis was just bedding in as the trust’s overseer and the verdict was out as to whether its appointment would be to the benefit of shareholders.

But Willis’s appointment has been a resounding success. Since my review the fund has generated a return of 95 per cent. The average global trust has a near 60 per cent return.

Willis has ensured the trust’s record for delivering annual dividend has remained intact. It now stands at 58 years. Annual charges are a tad below 0.6 per cent. An ideal core investment holding.

2 ARTEMIS GLOBAL INCOME

The manager of this £1.6billion fund, Jacob de Tusch-Lec, is one of the investment industry’s unsung stars. He has run it since it was launched in July 2010 and has delivered investors an intoxicating mix of capital and income return.

Back in March 2013 when I first interviewed him for Fund Focus, he told me his aim was to ‘build a diversified portfolio where we can maintain and increase the dividends payable to our investors’.

He has been true to his word, in the process delivering average annual income growth of 8 per cent and capital returns on top.

Total returns since then have topped 240 per cent against an average return for the global equity income peer group of near 170 per cent.

Tusch-Lec has never changed his spots, building the fund’s portfolio around quality companies that are attractively priced and pay dividends. But he always ensures the fund’s asset allocation acknowledges the state of the world economy. 

The result is a fund that has nearly a third of its assets in European-listed companies – he thinks US equities are too expensive.

Annual fund charges are just under 0.9 per cent. A super fund and a top investment manager.

3 BANKERS

This £1.2billion global trust lives up to its name. It’s a banker in terms of providing ballast to any portfolio. Managed by Janus Henderson Investors, it will not set the investment world on fire but it won’t let you down.

For income seekers it’s a dream, with 58 years of consecutive increases in annual dividend. Dividends are paid quarterly. Since I analysed the trust in February 2019, it has performed respectably, delivering returns of 55 per cent (better than its global peer group).

The fund has more than 100 holdings with a bias to the United States (more than 60 per cent of its assets are invested there). It has top 10 holdings in US tech companies Alphabet, Amazon, Apple, Meta and Microsoft.

The fund has been managed by Alex Crooke for nearly 22 years. His management is unusual with Crooke responsible for setting the trust’s asset allocation – and the various Janus Henderson investment desks responsible for running slices of the fund’s portfolio. Crooke told me in 2019: ‘The managers pick the stocks and I ensure jigsaw pieces come together and make a good fit.’ Ongoing annual charges are competitive at 0.51 per cent.

4 BLUE WHALE GROWTH

Investment fund Blue Whale Growth has been a success story since launching in 2017.

Backed by billionaire Peter Hargreaves, co-founder of investing platform Hargreaves Lansdown, the fund has grown in size to £1billion under the stewardship of Stephen Yiu.

Over the past five years, it has generated investor returns of 72 per cent – ahead of the average for its global peer group (63 per cent).

When I looked at the fund in July 2021, it had enjoyed two calendar years of strong returns – 27 per cent in 2019 and 26 per cent in 2020. Yet progress since has been slower as the result of the market wobbles of 2022 and more recently Trump’s arrival at the White House and his stance on tariffs.

Total returns since July 2021 have been just short of 30 per cent – higher than the average for its peers.

Yiu’s portfolio comprises big companies that he believes have the ability to grow and increase profits over the long term.

Top ten holdings include renowned growth stocks such as Nvidia – as well as lesser-known ones such as German pharma giant Sartorius and US tobacco company Philip Morris.

Yiu is one of the country’s most transparent fund managers who keeps investors abreast of portfolio changes. As the fund grows, he has also promised to chip away at its annual charge (now 1.08 per cent). A lovely investor-friendly touch. The icing on the cake is Hargreaves’ support. Peter has a big slug of money in the fund – a feather in Yiu’s cap – and only backs winners.

FundCalibre, an independent online investment research agency, gives the fund an elite rating, applauding Yiu’s ‘willingness to be pragmatic’ as an investment manager.

5 FUNDSMITH EQUITY

I last took a Fund Focus look at Fundsmith Equity nearly 11 years ago – the day before Neil Woodford’s launch of his doomed Equity Income Fund.

At the time, the fund had assets of £2 billion and had delivered returns since launch in November 2010 of 67 per cent.

Today, the fund has grown to £20 billion and, since writing about it in June 2014, it has generated returns in excess of 310 per cent compared to the average for its global peer group of just over 150 per cent. Terry Smith, manager of the fund and chief executive of investment house Fundsmith, has delivered in spades.

Although the fund’s relative performance has tailed off in recent years, underperforming the average for its peer group over both three and five years, Smith has built an astonishingly successful fund. In only one calendar year – 2022 – has the fund failed to generate a positive return for investors.

Smith is a long-term investor who invests in high-quality businesses that are valued attractively. He prefers companies that generate lots of cash and whose business model is difficult for rivals to replicate.

The fund currently has stakes in 28 companies with Meta, Microsoft and Visa among its top 10 holdings. Total annual charges are a tad over 1 per cent.

Judging by his recent appearance on Radio 4’s Today programme to talk about the retirement of investment legend Warren Buffett, Smith is determined to keep doing what he does best – making money for patient investors. A Warren Buffett in the making?

FundCalibre says Smith’s ‘clear, straightforward process of finding easy-to-understand businesses without overpaying for them has proved a hugely successful and resilient approach’.

6 GUINNESS GLOBAL INNOVATORS

I love the approach Guinness Global Investors takes with many of its funds. It sticks to its knitting, running portfolios in three broad churches: global equities, energy and Asia. It is also highly disciplined in how it runs these portfolios, ensuring none are overdependent on one stock. Regular profits are taken from the fund’s best performing holdings and recycled into stocks that are not doing as well. By doing this, a fund captures investment gains rather than blindly running with winners.

It has worked well on Guinness Global Innovators, a £940million fund that invests in companies benefiting from innovation.

I looked at the fund in December 2020 when it had made five-year gains for investors of 139 per cent. Although returns since have been modest, no investor can scoff at a 48 per cent return, against the 31 per cent return from the average global investment fund. The Guinness formula works.

The fund is still run by Dr Ian Mortimer and Matthew Page – managers who are not frightened to meet investors at specially organised events. I attended one and was rather impressed (more managers should do it). Total annual charges are 0.81 per cent.

7 JPMORGAN GLOBAL GROWTH & INCOME

This £2.8billion investment trust has performed quite brilliantly since I took a look at it in October 2019. It has delivered a return of 111 per cent – way above its global equity income peer group (just below 60 per cent).

It ticks many boxes, including low annual charges (0.48 per cent) which will reduce as the fund grows. Dividends are paid quarterly. It also lays down a quarterly payment at the start of its financial year, which it tries to stick to for the remaining three quarters.

So, for the year ending June 30, shareholders knew for near certainty their annual income would be 22.8pence a share (four payments of 5.7pence). Strings are primarily pulled by Helge Skibeli in London with James Cook (London) and Timothy Woodhouse (New York) adding support.

The trust is 67 per cent invested in the US with the four biggest positions being Microsoft, Amazon, Meta and Nvidia. Yet it’s the quality of the company rather than where it is listed which the managers are most interested in.

A super investment.

8 STS GLOBAL INCOME & GROWTH

This global investment trust has had a big makeover in recent years, appointing new managers in Troy Asset Management and changing its name (it was called Securities Trust of Scotland).

It was a transformation in its early stages when I interviewed in February 2021 Troy’s James Harries, manager of the trust.

Back then, Harries said the focus would be on delivering a mix of income growth and security of capital in recognition of the elderly shareholder base. He has not disappointed. Total returns since I spoke to Harries have been 40 per cent compared to an average return from the global peer group of 38 per cent.

The £289million trust is conservatively managed, a feature of all funds run by Troy. The result is a global fund that is short on US tech firms with the only exposure to the ‘Magnificent Seven’ US stocks being in Microsoft. Dividends are paid quarterly, delivering an annual income of about 2.7 per cent. The fund is a portfolio backstop. Solid rather than sexy.

The best stockpickers for Asian markets

9 JUPITER ASIAN INCOME

This £2 billion fund draws heavily on the experience of manager Jason Pidcock, who has been at the helm since its start in March 2016.

He knows Asian stock markets like the back of his hand and it shows in the results for Jupiter Asian Income: gains of 150 per cent plus since launch, 76 per cent over the past five years and 70 per cent since my review of the fund in March 2019.

The manager’s trump card lies in his investment approach.

He prefers large, capitalised stocks (the likes of tech giants TSMC and MediaTek in Taiwan) which pay dividends while concentrating the portfolio in Asia’s more established economies. He then backs his choices – the portfolio comprises just 27 stocks.

Income is equivalent to around 4 per cent a year (payments are quarterly) and total annual charges are around 1 per cent.

The fund gets the thumbs-up from both Hargreaves Lansdown and FundCalibre.

Hargreaves includes it on its wealth list of top funds, based on Pidcock’s ‘good stock picking’, the fund’s income bent (unusual for an Asian fund) and the manager’s long and successful record investing in Asia.

FundCalibre labels Jupiter Asian Income an ‘elite’ fund, describing it as ‘a relatively defensive Asia Pacific option’.

I met Pidcock a while ago and was impressed with the grasp he has of his brief. Nothing suggests this remains anything but firm. One of the best Asian-focused fund managers in the business. He is assisted by Sam Konrad.

10 SCHRODER JAPAN TRUST

When I had a look under the bonnet of this investment trust in July 2021, it was in recovery mode – having a 26 per cent return in the previous 12 months.

Under London-based manager Masaki Taketsume, the £290million trust has continued to deliver positive returns for shareholders, albeit at a slower rate. Since July 2021, returns are just short of 40 per cent, stealing a march on many rivals.

The trust underwent a name change in 2023, dropping its ‘growth’ label. It now delivers an attractive dividend, paid quarterly, which is equivalent to an income of around 4.3 per cent.

This stream of income, a reflection of Japanese companies becoming more shareholder- friendly, is a feature Taketsume referred to in 2021 and thought would play to the trust’s advantage. He has been proved right.

The annual ongoing charge is a tad over 1.1 per cent.