Andy Parsons, head of investment research at The Share Centre, suggests the Rathbone Global Opportunities fund for investors seeking a global investment opportunity away from the more mainstream core global funds.
Provided you have the appetite for risk, the utilisation of a global fund in an investment portfolio should potentially provide access to the best companies in the sectors and assets that a home market bias can not deliver directly.
For example, the US is a market leader in information technology, whilst within the automobile market, Germany and Japan often lead the way, whereas Denmark is innovative in energy development via wind power.
The Rathbone Global Opportunities fund stands out from others in this arena due to the manager’s strong investment approach. James Thomson has been at the helm of the fund since inception in 2001 and has built a solid track record.
The flexible unconstrained investment mandate allows James to back companies he feels are strong with good growth potential, regardless of the macro economic environment. For example, James avoids sectors such as banks and mining, because both are affected by the economic cycle and factors outside of their control.
Stock selection is achieved through his balanced approach to investing. Companies are screened using what James refers to as his ‘secret sauce’ analysis. He examines the business itself, the entrepreneurship and flexibility of management, differentiation of products and barriers to entry, and companies that under-promise and over-deliver. He also looks for obvious catalysts for the share price in terms of contract wins, earnings upgrades and positive news-flow.
The portfolio generally comprises of between 40 – 60 stocks with the current top holdings being Rightmove, Visa Inc and Swedish Match, a tobacco company that has no cigarette exposure and manufactures Snus, snuff, cigars, chewing tobacco and lighters. In terms of regional exposure, currently 35.50% is in the US, 21.13% is in the UK and 21.03% is in Europe.
Investors will find that this fund has no direct exposure to the emerging markets, a greater mid-cap presence than many of his peers and there is no currency hedging.
Finally, investors should appreciate that James is not a value investor and will be prepared to pay a premium in order to own a company where he has clearly identified a catalyst for the share price to move.