Your favourite global equity funds examined
FE Trustnet takes a closer look at the most viewed funds within the asset class on our site, examining how they have performed and what their prospects are.
By Mark Smith, Reporter, FE Trustnet
Monday March 26, 2012
GLG Japan Core Alpha
Out-of-favour since the banking crisis of the late 80s, seasoned investors have frequently been promised a new lease of life from Japan but it has disappointed so far.
However, an increasing number of fund managers believe the Japan equity market is set for a new lease of life, and are upping their exposure to the region as a result.
Europe is in the throes of its own banking crisis and the entire financial system needs to repair its balance sheet and delever debt. Japan has already been through this process and should look comparatively strong next to the rest of the developed world.
The best-quality companies have healthy balance sheets and are run by disciplined managers, and many strategists believe the market is extremely cheap by historic standards. If any investors are willing to open their mind to the region, it may just provide some robust returns.
£1.4bn GLG Japan Core Alpha fund has consistently been a top-quartile performer. Data from FE Analytics
shows that it has returned 81 per cent over the last decade, with only AXA Framlington Japan
returning more in its sector over that period. However, over five years the AXA fund has lost 16 per cent while the GLG fund has posted returns of 23 per cent.
Harker focuses predominantly on blue chip companies, which have underperformed the market since the late 1990s.
The fund will temporarily soft-close at the end of March for liquidity reasons.
Source: FE Analytics
M&G Global Dividend
In an environment that has been difficult for companies to reward investors with capital growth, people are looking for stocks that can provide reliable and growing returns. Britain is the traditional home of dividend payers but more and more overseas companies are beginning to see the value of giving regular payments to share-holders.
M&G Global Dividend is the leading fund of its kind to take advantage of this theme. FE Alpha Manager Stuart Rhodes’
approach differs from other global equity income managers in that the fund does not have a target yield. Instead Rhodes looks to identify companies that have the potential to grow their dividend consistently over time, often from low levels.
The fund has posted top-quartile returns over one- and three-year periods. Since its launch in July 2008 it has returned 55.17 per cent compared with 23.15 per cent from the average fund in the Global sector.
The £2.5bn portfolio has a minimum investment of £1,000 and a total expense ratio (TER) of 1.69 per cent.
Source: FE Analytics
JPM US Equity Income
The US traditionally leads the world into the recovery phase of the cycle and this time seems to be no different. Positive data on jobs and manufacturing created a wave of optimism that was the catalyst for the most recent market rally.
It is a widely held view that US managers find it difficult to consistently add value in an over-researched and highly efficient market. However, the JPM US Equity Income fund is one of only a handful in the IMA North America sector to offer access to the dividend theme.
"With Apple announcing that it will now pay a dividend, it has sent a message to the US market about the potential for providing investors with income," said Juliet Schooling-Latter, head of research at Chelsea Financial Services.
"The region is not one you usually think of for dividends as US companies tend to like their share buy-backs, but increasingly some businesses are rewarding their investors with some income."
"The JPM US Equity Income and Legg Mason US Equity Income funds are two that we are looking at very closely at the moment and they are likely to be very good long-term bets."
The £585m portfolio has returned 64.48 per cent over three years, marginally underperforming its sector average. However, with a one-year historic yield of 2.2 per cent, it is one of the highest-yielding US funds.
Source: FE Analytics