The past five years have seen two historic bear markets in a relatively short period of time, first the Covid-19 crash of 2020, followed by the inflationary sell-off in 2022.
It has also experienced two epic bull markets. The first being the “everything bubble” driven by central bank zero interest rate policy, and now an artificial intelligence-driven bull market which is still ongoing.
Investors who want to avoid portfolios that fluctuate wildly at the whim of the broader equity market, may want to consider funds with a history of delivering returns with lower volatility.
This is challenge in practice, because in most cases low volatility will come at the cost of high returns.
But there are eight global equity strategies that during the past five years which have managed to deliver top-ranked returns while maintaining lower volatility relative to their peers.
Below, FSA singles out the eight global equity strategies available for distribution in Singapore or Hong Kong with top-ranked returns and low volatility based on data from FE fundinfo*
| Fund | 5yr performance (%) | 5yr volatility (%) | ISIN Code |
| Dominion Global Trends Managed | 80.77 | 16.79 | MT7000005989 |
| Wellington Global Stewards | 80.59 | 16.59 | IE00BH3Q8P46 |
| Schroder ISF Global Equity Alpha | 79.19 | 16.16 | LU0225283273 |
| Schroder ISF Global Sustainable Growth | 76.51 | 16.82 | LU0557290698 |
| Allianz Global Premier Global High Payout | 74.22 | 16.67 | SG9999002232 |
| M&G Global Sustain Paris Aligned | 69.41 | 16.32 | GB0030938038 |
| JPM Global Dividend | 65.34 | 16.45 | LU0329201957 |
| Stewart Investors Worldwide Leaders | 63.43 | 16.37 | IE0008368304 |
Most of the funds above were growth-orientated strategies, an investment style which has paid off over the past few years, despite a brief period of value outperformance in 2022.
One aspect all the strategies above have in common is a focus on bottom-up fundamentals and quality stocks, instead of macro-driven investing or value names.
So-called “quality” companies tend to have a history of consistently growing their earnings, with high profitability and strong balance sheets – something that helps them withstand market fluctuations better than most.
Another commonality between many of the funds above is a focus on stewardship and/or sustainability. Wellington Global Stewards, Schroder ISF Global Sustainable Growth, M&G Global Sustain Paris Aligned and Stewart Investors Worldwide Leaders all have this approach.
Companies with management teams that have a track record of good stewardship and a focus on matters of sustainability can sustain higher returns over time, according to some investors.
Elsewhere, there were two strategies that emphasise dividend payouts: the JPM Global Dividend fund and the Allianz Global Premier Global High Payout fund.
These two funds place a focus on investing in high and growing dividend payers, which has paid off during times of high volatility since these firms tend to be more resilient during changing economic climates.
End-investors have also benefitted from the effect of compounding returns as dividends re-invested can lead to higher returns over many years.
* The performance data is in US dollar terms, five years to the date ending 31/11/2024. The five-year cumulative volatility data is to month end 31/11/2024.
