Features | Editorial | 1 Mins Read | by
My article in Master Investor looks at the case for investing in global funds.
Article PDF: Master-Investor-Magazine-Issue-47
Funds covered - Fundsmith Equity Fund, Lindsell Train Global, Scottish Mortgage Investment Trust, iShares S&P 500 ETF (CSP1).
9 potential advantages of global investment funds
1. Lower risk through diversification.
2. Lower volatility.
3. Significantly more opportunities to invest in.
4. More opportunities should mean higher returns.
5. Global funds appear to have performed well (as highlighted in the article).
6. Global managers can select the best countries to invest in.
7. Global funds tend to be relatively large, which helps to generate economies of scale.
8. Global fund fees can be modest if the economies of scale are passed on.
9. When it comes to buying overseas shares it is cheaper to invest through funds.
Potential disadvantages of global investment funds
1. Passive global funds are exposed to lower quality markets (Europe, the UK etc).
2. Active global funds may be less focused than national funds.