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3 Global Equity Funds to Invest in on January Rally
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Over the past year, very few sectors other than energy have done well. Similarly, there have been just a handful of international markets that have not felt price pressures arising out of the Russia-Ukraine war and the COVID situation in China. It is only at the turn of the year when various economic indicators have started suggesting that inflation may well be on its way down and prudent measures potentially taken up by policymakers might be able to thwart a global recession.
In the United States, GDP grew at a faster-than-expected rate in the fourth quarter. Coupled with the fact that the rate of inflation was seen to go down for the first time in over a year and the labor market remained robust, investors on Wall Street rejoiced at the resilience shown by the economy.
General consensus does, however, remain that an economic downturn may still be on its way in the second half of the year, but timely intervention by the Federal Reserve might be able to dampen its impact. China has opened up its markets in recent weeks after retracting its stringent COVID measures, and despite the crisis in Ukraine, business activity in the Eurozone is back to modest growth in January. Globally, there are signals that the international central banks may have finally been able to deal with the vagaries of 2022.
In such an environment, global equity funds have continued to receive inflows as fears of an impending recession have eased. The need to diversify one’s portfolio in uncertain times over geographies and territories has directed investors to venture into European and Asian markets. As of Jan 25, European and Asian equity funds have received $3.15 billion and $1.36 billion worth of inflows, while global bond funds accumulated a net $11.35 billion worth of inflows in four weeks of net buying.
Despite currency exchange rate risks, global equity funds seem lucrative for investors at this juncture as it is opening up emerging markets for them and lending access to Europe, which seems to be on a recovery path.
In summary, global equity funds provide much-required diversification and growth potential in a market that is expected to remain volatile for a while. Hence, astute investors should consider such funds at present. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have thus selected three global equity funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns and minimum initial investments within $5000 as well as carry a low expense ratio.
The Gabelli Global Rising Income and Dividend Fund (GAGCX - Free Report) seeks to invest most of its net assets in dividend-paying securities (such as common and preferred stock) or other income-producing securities (such as fixed-income securities). GAGCX advisors intend to invest in at least three countries, including the United States and will invest at least 40% of its total assets in countries other than the United States.
Mario J. Gabelli has been the lead manager of GAGCX since Feb 2, 1994. The three top country weights for GAGCX are 46.6% in the United States, 9.4% in France, and 9.1% in Japan.
GAGCX’s 3-year and 5-year annualized returns are 4.6% and 2.4%, respectively. Its net expense ratio is 0.90% compared to the category average of 1.29%. GAGCX has a Zacks Mutual Fund Rank #1. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Janus Henderson VIT Global Research Portfolio (JAWGX - Free Report) seeks long-term capital growth by investing in common stocks of companies of any size throughout the world. JAWGX normally invests in issuers from at least five different countries, including the United States, and offers dividends in June and December and capital gains in June.
Matthew Peron has been the lead manager of JAWGX since Apr 28, 2020. The three top country weights for JAWGX are 68.6% in the United States, 8.3% in the United Kingdom, and 4.6% in Canada.
JAWGX’s 3-year and 5-year annualized returns are 4.6% and 6.6%, respectively. Its net expense ratio is 0.64% compared to the category average of 1.12%. JAWGX has a Zacks Mutual Fund Rank #2.
American Century Global Small Cap Fund (AGCVX - Free Report) normally invests the majority of its net assets in securities issued by small-cap companies. AGCVX considers small-cap companies to include companies with market capitalizations not greater than that of the largest company on the MSCI ACWI Small Cap Index. The fund invests in countries globally, including the United States, foreign developed countries, and emerging markets.
Trevor D. Gurwich has been the lead manager of AGCVX since Mar 28, 2016. The three top country weights for AGCVX are 53.8% in the United States, 9.5% in Canada, and 8.6% in Japan.
AGCVX’s 3-year and 5-year annualized returns are 6.7% and 7.5%, respectively. Its net expense ratio is 1.10% compared to the category average of 1.26%. AGCVX has a Zacks Mutual Fund Rank #1.
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3 Global Equity Funds to Invest in on January Rally
Over the past year, very few sectors other than energy have done well. Similarly, there have been just a handful of international markets that have not felt price pressures arising out of the Russia-Ukraine war and the COVID situation in China. It is only at the turn of the year when various economic indicators have started suggesting that inflation may well be on its way down and prudent measures potentially taken up by policymakers might be able to thwart a global recession.
In the United States, GDP grew at a faster-than-expected rate in the fourth quarter. Coupled with the fact that the rate of inflation was seen to go down for the first time in over a year and the labor market remained robust, investors on Wall Street rejoiced at the resilience shown by the economy.
General consensus does, however, remain that an economic downturn may still be on its way in the second half of the year, but timely intervention by the Federal Reserve might be able to dampen its impact. China has opened up its markets in recent weeks after retracting its stringent COVID measures, and despite the crisis in Ukraine, business activity in the Eurozone is back to modest growth in January. Globally, there are signals that the international central banks may have finally been able to deal with the vagaries of 2022.
In such an environment, global equity funds have continued to receive inflows as fears of an impending recession have eased. The need to diversify one’s portfolio in uncertain times over geographies and territories has directed investors to venture into European and Asian markets. As of Jan 25, European and Asian equity funds have received $3.15 billion and $1.36 billion worth of inflows, while global bond funds accumulated a net $11.35 billion worth of inflows in four weeks of net buying.
Despite currency exchange rate risks, global equity funds seem lucrative for investors at this juncture as it is opening up emerging markets for them and lending access to Europe, which seems to be on a recovery path.
In summary, global equity funds provide much-required diversification and growth potential in a market that is expected to remain volatile for a while. Hence, astute investors should consider such funds at present. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have thus selected three global equity funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), have positive three-year and five-year annualized returns and minimum initial investments within $5000 as well as carry a low expense ratio.
The Gabelli Global Rising Income and Dividend Fund (GAGCX - Free Report) seeks to invest most of its net assets in dividend-paying securities (such as common and preferred stock) or other income-producing securities (such as fixed-income securities). GAGCX advisors intend to invest in at least three countries, including the United States and will invest at least 40% of its total assets in countries other than the United States.
Mario J. Gabelli has been the lead manager of GAGCX since Feb 2, 1994. The three top country weights for GAGCX are 46.6% in the United States, 9.4% in France, and 9.1% in Japan.
GAGCX’s 3-year and 5-year annualized returns are 4.6% and 2.4%, respectively. Its net expense ratio is 0.90% compared to the category average of 1.29%. GAGCX has a Zacks Mutual Fund Rank #1. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Janus Henderson VIT Global Research Portfolio (JAWGX - Free Report) seeks long-term capital growth by investing in common stocks of companies of any size throughout the world. JAWGX normally invests in issuers from at least five different countries, including the United States, and offers dividends in June and December and capital gains in June.
Matthew Peron has been the lead manager of JAWGX since Apr 28, 2020. The three top country weights for JAWGX are 68.6% in the United States, 8.3% in the United Kingdom, and 4.6% in Canada.
JAWGX’s 3-year and 5-year annualized returns are 4.6% and 6.6%, respectively. Its net expense ratio is 0.64% compared to the category average of 1.12%. JAWGX has a Zacks Mutual Fund Rank #2.
American Century Global Small Cap Fund (AGCVX - Free Report) normally invests the majority of its net assets in securities issued by small-cap companies. AGCVX considers small-cap companies to include companies with market capitalizations not greater than that of the largest company on the MSCI ACWI Small Cap Index. The fund invests in countries globally, including the United States, foreign developed countries, and emerging markets.
Trevor D. Gurwich has been the lead manager of AGCVX since Mar 28, 2016. The three top country weights for AGCVX are 53.8% in the United States, 9.5% in Canada, and 8.6% in Japan.
AGCVX’s 3-year and 5-year annualized returns are 6.7% and 7.5%, respectively. Its net expense ratio is 1.10% compared to the category average of 1.26%. AGCVX has a Zacks Mutual Fund Rank #1.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>