Investing in global equities (2024)

FAQs

Investing in global equities? ›

Investing in global equities brings you the opportunity to boost returns from the growth portion of your portfolio. By choosing global equities you can seek exposure to capital growth and dividend returns from some of the world's most successful companies.

Global equity funds are, increasingly, the bedrock of a stock market portfolio. Done well, they provide access to a carefully curated selection of the world's best companies in one ready-made portfolio. However, it's worth noting that they come in a wide variety of flavours.

International stocks offer U.S. investors diversification, reducing reliance on domestic markets and potentially enhancing returns. Non-U.S. stocks can provide exposure to global economic growth, mitigate geopolitical risks and tap into industries not heavily represented domestically.

We analyze companies around the world to identify and invest in fundamentally attractive stocks, on and off the beaten path.

Global equity investments are for investors seeking capital growth; however you must be prepared to accept a high to very high amount of risk.

In theory, young people investing for retirement should absolutely have 100% of their portfolio invested in equities. The biggest risk in the stock market is a crash which brings lower prices. Your best-case scenario as a young saver/investor is that you get to put more savings to work at lower prices.

Investors can access foreign stocks via ADRs, GDRs, direct investing, mutual funds, ETFs, and MNCs. Buying foreign stocks allows investors to diversify their portfolio's risk, in addition to giving them exposure to the growth of other economies.

As with any investment, international investing carries risks, including some unique to international markets, such as currency risk or changes to economic, political, or regulatory conditions.

Disadvantages Explained

Increased Transaction Costs: Investors typically pay more in commission and brokerage charges when they buy and sell international stocks, which reduces their overall returns. Taxes, stamp duties, levies, and exchange fees may also need to be paid, which dilute gains further.

By definition, international funds invest in non-U.S. markets, while global funds may invest in U.S. stocks alongside non-U.S. stocks. The definition may seem clear, but what may seem less clear is why an investor might select one over the other.

How do global equity funds work? ›

A global fund is a fund that invests in companies located anywhere in the world including the investor's own country. A global fund seeks to identify the best investments from a global universe of securities. Global funds may also be passively managed.

Some of the largest equity markets, or stock markets, in the world are the New York Stock Exchange, Nasdaq, Tokyo Stock Exchange, Shanghai Stock Exchange, and Euronext Europe. Companies list their stocks on an exchange as a way to obtain capital to grow their business.

Helps you diversify

Since global funds invest in a wide range of securities in several countries, the investment is truly diversified and does not carry concentration risk.

Their long-term growth potential makes equity funds attractive to those wanting to build wealth over time. A major benefit of investing in equity funds is diversification, a risk management strategy that involves spreading investments across a range of assets.

The main benefit from an equity investment is the possibility to increase the value of the principal amount invested. This comes in the form of capital gains and dividends. An equity fund offers investors a diversified investment option typically for a minimum initial investment amount.

Global Mixed invests at least 65% of your money into lower risk, fixed-interest assets, which makes this fund a more cautious investment option compared to Global Equity.