Where can you find the best UK stocks? There are dozens of ways to answer this question. One response that may not immediately spring to mind is “in a global equity fund”.
To clarify, I am not saying you should rush out and buy a global fund as a direct play on the UK, because in many cases this will leave you sorely disappointed. Our home market made up just 4.3 per cent of the (extremely US-heavy) MSCI World index at the end of March, and this is reflected in the composition of many global portfolios. As the “fund managers’ favourite international shares” segment of this magazine’s Ideas Farm series shows, UK shares are pretty rare among a selection of top global funds’ biggest overweight positions. It’s just names like Diageo (DGE) and London Stock Exchange Group (LSEG) that made the cut in a mid-March update for the series.
While the Ideas Farm presents a fairly tight list based on selected funds’ top three overweight positions at a given time, broadening out the search still yields very little. Perusing the top 10 holding lists of some of the last decade’s best performers, we find that Baillie Gifford Global Discovery (GB0006059553) recently had a 4 per cent exposure to Ocado (OCDO). Elsewhere Gam Star Disruptive Growth (IE00B5VMHR51) lists Boohoo (BOO) as a top 10 holding, while Rathbone Global Opportunities (GB00BH0P2M97) holds Next (NXT).