The top 10 global growth funds that have consistently beaten the benchmark

If you’re looking for exposure to global equities, you’ll find no shortage of options when it comes to investment funds – currently, there are over 320 funds in the Investment Association’s ‘Global’ fund sector that are available to UK investors.

However, when choosing a global equity fund for your portfolio, it’s important to do your research. Some funds have managed to consistently outperform their benchmarks in the past, while others have underperformed.

In this article, we look at 10 funds that have consistently beaten the benchmark over the past five years. Nearly all of these funds are available on popular fund platforms such as Hargreaves Lansdown and AJ Bell.

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Global Growth Funds that have consistently beaten their benchmark

  • Fundsmith Equity
  • Lindsell Train Global Equity
  • Morgan Stanley Global Brands
  • Investec Global Franchise
  • Seilern Stryx World Growth
  • Stonehage Fleming Global Best Ideas
  • Troy Trojan Global Equity
  • Liontrust Sustainable Future Global Growth
  • Baillie Gifford Global Discovery
  • Blue Whale Growth

All information correct as of August 2019

Fundsmith Equity

  • Fund size: £18.3bn
  • 1-year return: 18.4%
  • 3-year return: 70.1%
  • 5-year return: 171.3%
1yr 3yrs 5yrs
Fundsmith Equity 18.4% 70.1% 171.3%
MSCI World Index (developed markets) 10.3% 46.6% 85.0%

No list of top-performing global equity funds would be complete without mentioning the popular Fundsmith Equity fund. Launched in November 2010, this fund has been a fantastic performer for investors since its inception, generating an annualised return of 19.2% per year. Run by well-known portfolio manager Terry Smith, Fundsmith seeks to invest in high-quality companies that are extremely profitable, have strong balance sheets, and are resilient to change. While the fund’s performance has been excellent over the last five years, investors should note that this fund is highly concentrated and only holds 20 to 30 stocks, which does increase its risk relative to more diversified funds. Additionally, investors should also be cognizant of the fact that the fund has a large weighting to US stocks. The top three holdings at the end of June were PayPal, Microsoft, and Facebook.

Lindsell Train Global Equity

  • Fund size: £8.4bn
  • 1-year return: 18.6%
  • 3-year return: 86.7%
  • 5-year return: 172.9%
1yr 3yrs 5yrs
Lindsell Train Global Equity 18.6% 86.7% 172.9%
MSCI World Index (developed markets) 10.3% 46.6% 85.0%

Another global equity fund that is extremely popular with investors is the Lindsell Train Global Equity fund, which is run by portfolio managers Nick Train and Michael Lindsell. This fund has been one of the top performers in its category over three and five years, boosted by strong exposure to the Consumer Goods sector. Like Fundsmith, this is a concentrated fund that only holds a small number of high-quality stocks, which increases its risk. In addition, its substantial exposure to Consumer Goods companies is another risk to consider. The top three holdings at the end of June were Unilever, Heineken, and Diageo.

Morgan Stanley Global Brands

  • Fund size: £1.2bn
  • 1-year return: 18.8%
  • 3-year return: 58.5%
  • 5-year return: 121.6%
1yr 3yrs 5yrs
Morgan Stanley Global Brands 18.8% 58.5% 121.6%
MSCI World Index (developed markets) 10.3% 46.6% 85.0%

The Morgan Stanley Global Brands fund is a unique global equity fund that has a specific focus on companies with strong brands. These companies tend to have dominant market positions, and are able to generate strong cash flows and high returns on capital. This fund’s performance has been excellent in recent years due to the fact that many companies with brand-related competitive advantages have outperformed. However, there’s no guarantee that this investment strategy will continue to deliver such impressive results in the future. The top three holdings at the end of June were Microsoft, Reckitt Benckiser, and Philip Morris.

Investec Global Franchise

  • Fund size: $4.9bn
  • 1-year return: 15.6%
  • 3-year return: 49.6%
  • 5-year return: 110.8%
1yr 3yrs 5yrs
Investec Global Franchise 15.6% 49.6% 110.8%
MSCI World Index (developed markets) 10.3% 46.6% 85.0%

The Investec Global Franchise fund is another global equity fund with a strong focus on high-quality companies. A high-conviction fund which typically holds 25 to 40 stocks, it invests in best-in-class companies around the world which typically have strong brands, customer loyalty, low leverage, and are more resilient in times of economic uncertainty. The fund also avoids capital intensive and/or leveraged businesses and therefore holds no mining companies, utilities, or banks. Risks to be aware of with this fund include its concentrated nature and its substantial weighting to the US. The top three holdings at the end of June were Visa, Microsoft, and Verisign.

Seilern Stryx World Growth

  • Fund size: $1.1bn
  • 1-year return: 14.9%
  • 3-year return: 63.0%
  • 5-year return: 144.0%
1yr 3yrs 5yrs
Seilern Stryx World Growth 14.9% 63.0% 144.0%
MSCI World Index (developed markets) 10.3% 46.6% 85.0%

The Seilern Stryx World Growth fund is an under-the-radar fund which aims to achieve absolute returns with moderate risk by investing in high-quality companies with proven track records, sound financials, and predictable earnings. Returning 144% over the five-year period to the end of June, it has been a top performer. Although this fund has a 5-star Morningstar rating, investors should be conscious of the fact that this fund has substantial exposure to the US and is also highly concentrated in nature which does increase its risk. The top three holdings at the end of June were Mastercard, Alphabet, and Dassault Systémes.

Stonehage Fleming Global Best Ideas

  • Fund size: £846m
  • 1-year return: 15.5%
  • 3-year return: 49.6%
  • 5-year return: 116.1%
1yr 3yrs 5yrs
Stonehage Fleming Global Best Ideas Equity 15.5% 49.6% 116.1%
MSCI World Index (developed markets) 10.3% 46.6% 85.0%

The Stonehage Fleming Global Best Ideas fund is another under-the-radar, high-conviction global equity fund that has performed very well over the last few years and has consistently outperformed the benchmark. This fund focuses on ‘best of breed’ businesses that are capable of generating sustainable organic growth, strong free cash flow, and growing dividends. While the fund invests predominantly in large-cap equities, it also considers exceptional medium-sized firms. Risks to consider with this fund include its concentrated nature and its significant exposure to US equities. The top three holdings at the end of June were Visa, Zoetis, and PayPal.

Troy Trojan Global Equity

  • Fund size: £272m
  • 1-year return: 18.1%
  • 3-year return: 49.8%
  • 5-year return: 103.7%
1yr 3yrs 5yrs
Troy Trojan Global Equity 18.1% 49.8% 103.7%
MSCI World Index (developed markets) 10.3% 46.6% 85.0%

Troy Asset Management describes its investment style as ‘unconventional, yet conservative’ and the aim of the Troy Trojan Global Equity fund is to provide investors with capital growth over the long term. Over the last five years, this fund has been a very solid performer, more than doubling investors’ money. However, investors should note that as a concentrated fund that holds just over 30 stocks, it is riskier than a more diversified fund. The top three holdings at the end of June were Microsoft, PayPal, and Alphabet.

Liontrust Sustainable Future Global Growth

  • Fund size: £386m
  • 1-year return: 16.8%
  • 3-year return: 65.2%
  • 5-year return: 95.9%
1yr 3yrs 5yrs
Liontrust Sustainable Future Global Growth 16.8% 65.2% 95.9%
MSCI World Index (developed markets) 10.3% 46.6% 85.0%

Sustainable investing has increased in popularity in recent years and it’s great to see a sustainable fund make our list of top-performing funds. This particular fund, from boutique investment management group Liontrust, aims to generate long-term capital growth while only investing in companies that meet Liontrust’s rules for environmental and social responsibility. While this fund has delivered excellent returns over the last five years and has comfortably beaten the benchmark, investors should be aware that its track record since inception in 2001 is not as stellar – it did underperform in its early years. The top three holdings at the end of June were Cellnex Telecom, Alphabet, and Iqvia Holdings.

Baillie Gifford Global Discovery

  • Fund size: £818m
  • 1-year return: 8.8%
  • 3-year return: 91.0%
  • 5-year return: 129.1%
1yr 3yrs 5yrs
Baillie Gifford Global Discovery 8.8% 91.0% 129.1%
S&P Global Small Cap Index 1.8% 41.8% 76.0%

The Baillie Gifford Global Discovery fund is a global equity fund which has a bias towards smaller companies. It aims to invest in companies that offer significant growth prospects and operate in industries with potential for structural change and innovation. While performance over one year has been a little underwhelming compared to some of the other funds on this list, performance over three and five years has been excellent, boosted by the fund’s exposure to the Information Technology sector. In terms of risk, investors should be conscious of the fact that this fund may be more volatile than large-cap focused funds during periods of market turbulence, due to its focus on smaller companies. The top three holdings at the end of June were LendingTree, Ocado, and MarketAxess.

Blue Whale Growth

Fund size: £174m

  • 1-year return: 19.8%
  • 3-year return: NA
  • 5-year return: NA
1yr 3yrs 5yrs
Blue Whale Growth 19.8% NA NA
MSCI World Index (developed markets) 10.3% 46.6% 85.0%

Finally, we have the Blue Whale Growth fund. This is a relatively new fund that was launched in September 2017. While it does not yet have a long-term track record, the fund has been one of the best performers in its class since its inception, returning 39.6% to the end of June. Interestingly, Peter Hargreaves, who co-founded Hargreaves Lansdown, is Chairman of Blue Whale and has invested a ‘substantial proportion’ of his family’s wealth into this fund. Blue Whale is managed by Stephen Yiu, whose goal is to invest in companies that can generate exceptional returns for investors. Yiu only invests in what he considers to be genuine industry leaders, so the fund never invests in companies that are competing against each other. Like many other funds on this list, Blue Whale is a highly concentrated fund, which means it is higher risk. It also has a very high weighting to the US. The top three holdings at the end of June were Microsoft, Amazon, and Adobe.

Fund 1yr return 3yr return 5yr return
Fundsmith Equity 18.4% 70.1% 171.3%
Lindsell Train Global Equity 18.6% 86.7% 172.9%
Morgan Stanley Global Brands 18.8% 58.5% 121.6%
Investec Global Franchise 15.6% 49.6% 110.8%
Seilern Stryx World Growth 14.9% 63.0% 144.0%
Stonehage Fleming Global Best Ideas Equity 15.5% 49.6% 116.1%
Troy Trojan Global Equity 18.1% 49.8% 103.7%
Liontrust Sustainable Future Global Growth 16.8% 65.2% 95.9%
Baillie Gifford Global Discovery* 8.8% 91.0% 129.1%
Blue Whale Growth 19.8% NA NA
MSCI World Index (developed markets) 10.3% 46.6% 85.0%
S&P Global Small Cap Index 1.8% 41.8% 76.0%

* Baillie Gifford Global Discovery is benchmarked against the S&P Global Small Cap Index

All performance figures are to the end of June

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