Top 10 Global Equity Funds, Mutual Funds and ETFs to Buy in 2023 (2023)

• We analyze the top ten funds, mutual funds and ETFs, including assets and liabilities.
• Passive funds are popular because they track widely followed indexes like the S&P 500 or FTSE 100 cheaply.
• We compare the pros and cons of five active mutual funds and five passive ETFs.

2022 is a year that investors would like to forget after its end. War, inflation and bear markets. No joking.

In these turbulent times, portfolio returns can fluctuate wildly from month to month. To mitigate this, investors looked to mutual funds and mutual funds to stabilize returns and diversify portfolio risk. But is capital really a safe haven? And what funds should investors turn to?

What to look for in a fund?

Answering these questions requires an understanding of equity trusts/funds. For example,

• Actions– most investment entities hold numerous financial instruments according to predetermined guidelines. It is important to know what these guidelines are. Parameters that determine inputs include:
  1. markets– where the fund operates, e.g. Is the fund global, regional (eg Asia Pacific, Europe, Emerging Markets) or single country (eg UK, US, China, Japan, India, etc.)?
  2. sectors– Does the fund draw ideas from a sector such as technology, finance, healthcare or mining?
  3. Topics– new investment topics are created by dedicated funds (e.g. clean energy, BRIC, electric cars)
• Implementation– Mutual funds often depend on the performance of their underlying assets. Market cycles also play a role. Most equity funds suffer during a bear market. A single industry fund will suffer the most if the industry goes through a boom and bust cycle.
• directional deviation– most mutual funds are long-term in nature, which means that mutual funds often benefit from rising prices.
• loans– is the fund leveraged? Some mutual funds explicitly avoid this to make returns less volatile.

Top 5 Active Equity Funds and Mutual Funds

Active equity funds are funds that do not blindly follow any equity index. Fund managers will research and find the best stocks for the fund according to the fund's mandates. Some of the most popular ones are:

• stock funds
• Scottish Mortgage Investment Trust (LSE: SMT)
• Polar Technology Investment Fund (LSE: PCT)
• Smithson Investment Trust (LSE:SSON)
• Blackrock World Mining Trust (LSE: BRWM)

1. Founder's Fund

Founder's Fund (www.fundsmith.co.uk) is one of the most popular active investment funds in the British market. Founded by Terry Smith in 2010A £22 billion fundhas attracted a lot of attention in recent years because of its clear and well-formulated guidelines ("high quality companies that can maintain a high return on working capital employed', zuser manual here).

According to herpublic bulletin, the fund invests primarily in the US (69%), followed by France (10%) and Denmark (9%). In other words, you can look at it as a US-focused fund with some European stocks. The top 3 holding companies (Nov 2022) of the fund areMicrosoft(USA: MSFT),Novo NordiskEUL'Oreal.

The fund has delivered several significant returns over the years (see below). Six times in the past decade, it has delivered an annual return of over 20% - a fantastic result. No wonder investors like his approach.

Source:Fundsmith.co.uk/factsheet

Advantages and disadvantages

• A global fund managed by an experienced manager with a proven track record
• Fundsmith's portfolio targets large, liquid growth stocks, particularly in the US
• Combined holdings (29) - meaning returns can be more volatile
• Growth stocks can underperform value stocks during a bear market

2. Scottish Mortgage Investment Fund

Scottish Mortgage IT (SMT) built an enduring reputation and record profits by overweighting many growth stocks in the US and China during the recent bull market. INMarch 2020 (annual report), for example, an SMT listAmazonas (AMZN),Tesla (TSLA),TencentEUAli Baba(BABA) as the four largest holdings with 30% of the portfolio.

As we all know, Tesla launched 10 times soon after, while the other three also doubled. This merger of issued shares increased SMT's share price from £4.6 to £15 within 18 months.

However, investing in high-growth stocks only works wonders when the market is doing well. As macroeconomic conditions tightened, these positive actions subsided.Tesla,for example, they are down 50% in some months of 2022. Other underperforming tech companies are dragging down SMT scores significantly.

Pros and cons

• Fund with long-term holdings in many top tier companies - with a focus on industry leaders in technology and biotechnology
• Proven returns during the last bull cycle
• Growth stocks go both ways - up and down
• SMT has several unlisted titles (eg ByteDance, Stripe, and NorthVolt). The value of these investments is less certain.

3. Polar Capital Technology Fund

In addition to Scottish Mortgage, Polar Capital Technology IT (PCT) is another popular choice for investors looking to invest in an actively managed mutual fund that specializes in just one area, namely technology.

According toPCT documents, the company selects 100 shares out of 4,000 through a rigorous methodology. The PCT portfolio is focused on the US and Canada (71%). This is natural because North America's technology sector is the largest. The area has more opportunities. The three main inputs of the PCT areMicrosoft(MSFT),litter(AAPL) eGoogle(GOOG).

The PCT chart was bullish through early 2022. Now the £2.2bn bottom is likely to dip below long-term support.

Pros and cons

• Focused on a growing industry. Mutual funds outperform the market when the industry is booming. and underperforms during cyclical downturns
• A bearish tech stock market will lead to major underperformance
• Cheaper alternative ETFs available (e.g. Nasdaq 100)

4. Smithson Investment Trust

The Smithson Investment Trust (LON:SSON) is relatively new to the market. It was presented at the LSE in 2018 and generated a lot of interest. OneThe IT (prospect)AND "invest in companies the size of SMID that show sustainable high profitability over time and generate significant cash flow that can be reinvested in the business.”

As of November 2021, Smithson is on a high. Prices have doubled from the starting price (see table below). The past year, however, has been a roller coaster period for SSON. The £2.3bn fund invests in approximately 32 stocks with an average market capitalization of $6.7bn. Two-fifths of its assets are listed in the US (42%) and 17.7% in the US. in the United Kingdom. The first three entries areMoncler,I rememberEUSabre.

Advantages and disadvantages

• Includes fast-growing mid-cap and small-cap companies worldwide
• Smaller stocks can generate higher returns in the long run.
• SSON complements other large cap funds
• Smaller stocks can have more volatile returns during a bear market

5. Blackrock World Mining Fund

Inflation is largely driven by sustained increases in the prices of basic commodities such as energy, food and light goods. Companies involved in the exploration, mining and extraction of these commodities are reaping huge benefits from this commodity boom.

Blackrock World Mining IT (BRWM) is well positioned to lead this boom. Opurpose of the fund (prospectus here)to guarantee "diversified investments in mining and mineral assets around the world, actively managed to maximize total return."

The £1.2bn fund holds assets in major mines such asBHP, Vale, Glencore, Anglo-AmericanEUfirst quantumThe fund invests globally – as mining assets are spread across the world. In the cargo area,BRWM actively invests in diversificationCopper (21.4%) and gold (12%) follow. The fund was generally resilient throughout 2022 despite challenging market conditions.

Advantages and disadvantages

• Fueling the commodity boom by investing in miners and a specialist materials company
• Hedging against other falling stock sectors such as consumer and technology
• Generous dividends – 6.5% in 2022

• Related Guide -Compare the best UK stock platforms here

Top 5 passive stock funds

Now we turn to passive stock funds. Most of the funds below are exchange-traded funds (ETFs) because they are cheaper, sufficiently diversified and easily traded in the market. The following ETFs cover a wide range of markets:

• american vanguard(TO WAKE UP)
• iShares FTSE 100(ISF)
• Vanguard FTSE All World Equity(VWRL)
• iShares EM(EMIM)
• iShares Euro Stoxx 50(UE)

1. Vanguard USA ETF (VUSA)

The US Stock Exchange is the largest in the world. Any investor looking to build a decent long-term portfolio should have some exposure to US companies. The NYSE and Nasdaq list some of the world's biggest companies, including Apple (AAPL), Google (GOOG) and Tesla (TSLA). An effective way to enter this dynamic market is with an ETF like Vanguard USA (see our full VUSA review here).

The fund tracks the S&P 500 blue chip index and has approximately$32 billion under management (fact sheet). The fund's largest sector is information technology, followed by healthcare and finance. Over the past decade, VUSA has performed well, rising from 16th to 68th.

Advantages and disadvantages

• Exposure to the world's largest economy, with many dynamic and fast-growing companies
• He has over 500 top stocks - so the portfolio is quite diversified.
• The tech boom is coming to an end. Therefore, we are looking at a possible pullback from this 10-year bull cycle. A bear market in this area could bring the index down.

Some exposure to the FTSE 100 may be desirable for UK investors as many of these companies listed on the LSE have made gains internationally. Sterling's weakness makes these foreign inflows increasingly valuable.

Over the past 12 months, the large-cap FTSE 100 index has significantly outperformed the country's FTSE 250. In fact, the gap between the performance of these companies is the widest in nearly two decades, indicating that capital is leaving UK companies for international markets (see below):

Source:Financial Times (paywall)

£11 billion fund (report card) focuses on monitoring the FTSE 100 index - which, as the name suggests, has 100 items, includingConcha(VENTO),AstraZeneca(AZN) IUnilever(ULVR). The three largest sectors are consumer goods, finance and energy.

Pros and cons

• Exposure to the largest listed companies on the LSE with significant overseas earnings
• Exposure to energy and miners benefiting from inflation
• Dividends are generous - the return on distribution is 3.65%.

3. Vanguard FTSE All-World ETF (VWRL)

This ETF is trackingFTSE World Indexthat according to herreport cardlayers"a market capitalization weighted index that tracks the performance of large and mid cap companies from the FTSE Global Equity Index Series and covers 90-95% of the investment market". Most of the background islitter(USA:AAPL) thenMicrosoft(United States: MSFT) andAmazonas(USA: AMZN). OThe ETF has approximately $8.9 billionunder management.

Advantages and disadvantages

• The fund has more than 3,700 units in 50 countries. Your reservation is spread out as much as possible. A significant drop in one company will not affect the fund too much.
• Concentrated in the US and Europe - these two regions account for almost 79% of the total fund. Undoubtedly, it is a global fund developed
• Returns will follow broad market indexes, although VWRL's 20% stake in tech stocks could make price movements volatile

Its IPO results have been bullish since the US tech boom:

The iShares MSCI EM ETF is a fund that aims to gain exposure to emerging markets. OETF tracks the MSCI EM indexand manages around £15 billion. some farms,taiwanese semiconductor(onestocks bought by Warren BuffettLately),TencentEUSamsung Electronics.

Advantages and disadvantages

• Exposure to some economic developments in emerging markets (China/India)
• Exposure to large, medium and small companies
• More than 3,000 assets – this means that EMIM returns will not fluctuate much. That said, its top 10 holdings make up nearly 20% of the fund. This means that the performance of these stocks has an impact on the fund.

Its performance since debuting on the LSE has been generally bullish, but there have been long periods of steady trading:

Europe is home to many well-known and competitive companies. German automobiles and French luxury brands are two unique industries that have a global audience. Given the UK's proximity to Europe, this market is important to the UK economy and investors can take advantage of this by buying attractive European equities.

A low cost ETF like the iShare Euro Stoxx 50 ETF is one of the tools you can use to do just that. This ETF tracks the Euro Stoxx 50 index – the fifty largest companies across the eurozone. O€3.5 billion ETF (prospectus)he hasASML,LVMHEUlindoas the top 3 farms.

His performances since 2012 have been pretty solid, but admittedly a little uninspiring.

Advantages and disadvantages

• Exposure to major European equities with a global revenue stream
• Only limited to large and small caps, so mid and small caps are lost
• Productivity has been sluggish for the last decade

• Want to invest in ETFs?Check out our guide to the best ETF platforms here