Investments  

Three alternatives to Fundsmith and Lindsell Train

Three alternatives to Fundsmith and Lindsell Train
  Photo by Magda Ehlers via Pexels

The market for global equity funds has historically been dominated by Fundsmith and Lindsell Train, with the behemoths managing £24.8bn and £7bn respectively of investors' money.

But in recent months the managers' favoured style of growth investing has suffered from a market rotation, and investors would not be blamed for having a look around to see what else is out there.

To that end, we asked three fund selectors what their top global equity fund is, apart from the two giants.

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Janus Henderson Global Sustainable Equity Fund

Meera Hearnden​, investment director at Parmenion, has picked Janus Henderson’s Global Sustainable Equity Fund.

She said the group uses global funds within its ethical solutions as it allows them to capture the full opportunity set available in sustainable investing within a global landscape, but importantly with managers that have long term track records. 

“Notwithstanding the fact [the managers] have over 30 years of sustainable investing experience, they have a large team of global sector analysts.”

The fund is an all-cap strategy, but has a slight mid-cap bias to capture growth opportunities within this area of the market. 

“Given the nature of its underlying investments, it has a growth bias and so it has benefited from the ‘growth’ tailwind in recent years. 

“However, it may perform less well in a value style rotation, but this is a long term global holding, which when blended with other strategies, should deliver consistently good risk adjusted returns", she added.

BNY Mellon Long Term Global Equity fund

Ajay Vaid, investment research analyst for Square Mile Investment Consulting and Research picked this fund, which he said is a “compelling proposition” for investors seeking to grow their capital over the longer term.

“It is managed by BNY Mellon´s affiliate Walter Scott which has a simple mantra of investing in high quality business and holding them for the long term. 

“Underlying Walter Scott´s success is its philosophy and process, which sees the well-disciplined investment team apply a highly collaborative approach to investing in companies that meet the firm’s strict investment criteria.”

He added that although all trading decisions are made by the investment executive (a team of three of the most senior members of the business), these follow rigorous debate across the entire investment team, and stock selection has proved “highly successful” over the history of this strategy. 

“The fund typically holds 40 to 60 high-quality businesses and it avoids companies requiring significant capital, such as mining and oil-related firms, and those listed in regions where corporate governance is considered poor, such as some emerging markets,” he added.

According to Vaid, this means the portfolio will exhibit some exposure biases and it is constructed without reference to its benchmark, the FTSE All World. 

“The team’s primary focus is on meeting the fund's real return performance objectives rather than index relative returns.”

He said the fund has a more conservative return profile and will typically lag more exuberant markets, but will provide some defensive stability during times of market stress.