Just 10 funds in the IA Global sector are currently in the top quartile for the past one, three, five and 10 years, research by FE Trustnet shows. 
Every investor wants to look over their portfolio and see that they have picked the best funds over all time frames, so in this article we set out to find just how many funds from the competitive global equities sector have done this to the end of April 2019.
After filtering the 237 funds with a track record of at least 10 years for top-quartile numbers over the four time frames, just 10 remained – as can be seen in the table below.
Source: FE Analytics
The largest of the 10 shortlisted funds is Morg Stnly Global Brands, with its assets under management of £9.7bn (a mirror strategy – the £1.1bn Morgan Stanley Global Brands fund – can also be seen on the above list).
Run by FE Alpha Manager William Lock alongside seven co-managers, Morg Stnly Global Brands has made a return of 282.17 per cent over the past decade.
The fund’s portfolio is built around high-quality companies with strong intangible assets, which the managers consider a rare find but argue that investing in well-managed companies will help to deliver long-term outperformance while offering a degree of downside protection from volatile markets.
Quality-growth stocks such as this have led the bull market of the past decade, as the wave of liquidity created by ultra-low interest rates and quantitative easing tending to head into this part of the market.
Morg Stnly Global Brands’ largest sector allocation is telecoms, media and technology at 28.81 per cent while around 57.5 per cent of the portfolio is in the US. The biggest individual holding is Reckitt Benckiser Group, makers of Durex and Dettol, at 8.46 per cent with Microsoft Corp second with 7.12 per cent.
The fund has an ongoing charges figure (OCF) of 0.99 per cent.
However, one fund on the list above has outperformed all the others in each of the four time frames in question: Baillie Gifford Global Discovery.
This £777m fund is headed up by FE Alpha Manager Douglas Brodie, who focuses on companies that have the future potential to bring about structural change and innovation in order to make long-term returns and future growth prospects, with a bias towards smaller companies.
Fund vs sector over all four time frames
Source: FE Analytics
This has paid off over the long term. Baillie Gifford Global Discovery is up 565.15 per cent over 10 years; in comparison, Seilern Stryx World Growth – which is the second-best performer of the 10 funds above – made 356.77 per cent.
The FE Invest team, which has the fund on its Approved List, said: “Although this has been achieved with an above-average level of risk, the ability to beat the market has been fairly consistent and has clearly paid off for investors.
“The stock picking capability of the Baillie Gifford smaller companies team has been proved many times over and is the key contributor to the fund’s outperformance. However, due to the volatile nature of the universe the fund has often lost more than markets over the short term.”
Baillie Gifford Global Discovery has a 0.75 per cent OCF.
Most of the IA Global members on the above list are generalist in their approach, with one of the better known being the £1.2bn Rathbone Global Opportunities fund.
Run by FE Alpha Manager James Thomson with Sammy Dow as deputy, the fund is built around under-the-radar and out-of-favour growth companies, with no restraints when it comes to geography or sector. That said, it does hold a core defensive bucket of reliable growth stocks, which help to reduce the fund's volatility.
This flexible approach means Thomson can navigate varying market conditions. He recently told FE Trustnet that he has taken the defensive element of the portfolio to its maximum limit, amid growing political risks and slowing growth.
Rathbone Global Opportunities has a 0.79 per cent OCF.
Fund vs sector over all four time frames
Source: FE Analytics
Not every fund on the list takes a generalist approach, however. We already looked at Morg Stnly Global Brands but another specialist mandate is Pictet Security.
Managed by Yves Kramer, Alexandre Mouthon, Rachele Beata, the £3.7bn fund focuses on companies that provide safety and security products for systems, people or organisations.
The managers believe this represents “a long-term trend with strong fundamentals and good diversification properties”.
They added: “Given the persistent uncertainty surrounding the current state of the economy, we believe that securing the critical infrastructures of countries, protecting citizens’ integrity and ensuring the ability of businesses to meet their objectives is a top priority.
“We therefore remain confident about the fund’s ability to outpace the global equity market on earnings and cash-flow growth over the next few years, as stricter regulation (such as PSD2, GDPR) is likely to remain a key driver for security, and IT systems and cybersecurity remain a priority for governments and companies.”
Pictet Security has an OCF of 1.2 per cent.