What you need to know about investing in global funds

A global fund invested in shares around the world makes a good core element for your portfolio.

A tracker or index fund will follow the global index, while an active fund will try to cherry pick the best companies, which could increase your returns but also the chance the manager could get it wrong, or their style will fall out of favour.

These are ideas, not recommendations – always do your own research:

Passive funds 

Fidelity Index World Fund P

This follows the companies that make up the MSCI World Index of developed markets. Ongoing charges: 0.13%

HSBC FTSE All World Index Fund C

This follows a global index that also includes an emerging markets element. Ongoing charges: 0.16%

iShares MSCI ACWI ETF

This is an ETF that follows an index made up of both developed and emerging markets companies.Ongoing charges: 0.6%

Active funds

These are four of the most popular global funds and investment trusts

Lindsell Train Global Equity

This fund buys and holds what the well-respected managers Michael Lindsell and Nick Train see as the world’s best companies. 

Nick Train has been dubbed Britain’s answer to Warren Buffett due to his buy and hold quality and value strategy. This global equity fund run with his business partner has paid off handsomely, with its relatively small portfolio making it third best sector performer over five years.  Ongoing charges: 0.74%

Fundsmith Equity

Terry Smith’s fund invests in global companies he perceives as having an enduring advantage. This means that it heavily backs consumer brands and well-known names. These companies are picked due to their high return on and considered as those with the power to turn cash into consistent profit. 

Performance has been good but it is heavily weighted to the US, read more on Fundsmith here. Ongoing charges: 0.97%

Witan investment trust

This investment trust targets long-term growth and invests with a variety of fund managers around the world, however, a third of it is in UK shares. 

Witan is offered recommended as a solid cornerstone investment in a portfolio and due to its multi-manager approach it spreads its risk widely, with no single company making up more than 2% of the trust’s holdings. Ongoing charges: 0.86% 

Scottish Mortgage 

This is the third best-performing global investment trust over ten years and Scottish Mortgage regularly features on best buy lists. It is a big trust that’s cheap to own and which targets what the managers see as the world’s most exciting companies. 

That means big bets on firms they think could change the world, such as Tesla, Amazon and Baidu, and also investments in companies not listed on the stock market. Its investment strategy has paid off but means it is riskier than other options. Ongoing charges: 0.44%