Investing in global equities (2024)

FAQs

Is it good to invest in global equity? ›

Potential for strong returns and higher risks

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

What is an equity fund? A mutual fund that is primarily invested in stocks.

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.

Over the past two years, performance in international equity markets has been strong, especially in Europe, Japan and EM excluding China. The contribution to returns has been healthy, with equal heavy lifting being done by multiple expansion, earnings growth and dividends.

Equity Mutual Funds as a category are considered 'High Risk' investment products. While all equity funds are exposed to market risks, the degree of risk varies from fund to fund and depends on the type of equity fund.

Equity funds provide investors with several benefits, including diversification, professional management, and the potential for superior returns. These funds also come with risks associated with stock market volatility and losses.

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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.

Usually, investors opt for these funds to further diversify their investment portfolios. Since global funds invest in a wide range of securities in several countries, the investment is truly diversified and does not carry concentration risk.

Are international equity funds risky? ›

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.

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.

Global equity funds buy stocks domestically and around the world, and come in hundreds of combinations of guiding philosophies, allocation strategies, and management styles.

Given the higher risk tolerance associated with equity funds, they are best suited to long-term investors with at least 5 years to invest.

The Bottom Line. Equity funds offer a convenient way to gain exposure to a diversified portfolio of stocks, with the potential for higher returns than bonds or cash. Investors can choose between actively managed and passive funds, funds that invest in a range of company sizes, growth vs.

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.