International equities definition
Investing beyond your own country’s borders opens a world of opportunities - literally.
International equities are shares in companies listed on stock exchanges globally, including those in developed and emerging markets.
Investing in equities of this type commonly means investing outside of a domestic market, although investors may find that some international equity funds invest in their home market, too.
Key benefits of international equities
- Diversification reduces risk in a portfolio – by spreading the range of investments, the less exposed a portfolio is to the fortunes of just one financial asset.
- International equities offer investors the fullest range of markets, industries, companies, investment styles, countries and corporate objectives, including some that may not be available to any or a great extent in investors’ domestic markets.
- For stock-pickers, these equities represent the biggest potential pool of opportunities and risk levels.
However, while some international equity funds may invest globally, some may concentrate on specific regions or countries. The regions of the world all offer opportunities.
As the world’s largest economy, the United States accounts for the biggest single country share – approximately half* – of global market capitalisation. It is the most lucrative consumer market and a powerhouse of innovation, especially in the field of technology. The country has a well-earned reputation for its ongoing ability to re-invent itself and lead the way in many industries, including dot coms, financial services, pharmaceuticals, automobiles and retailers.
Europe too offers many options to international investors. Its trading bloc is the world’s largest while the continent’s 50 countries offer an unmatched diversity of cultures and economies, making it an ideal market by which to diversify any portfolio of equities. It is known as a particularly good hunting ground for stock-picking investors who can consistently identify the best opportunities, especially in leading industries such as automobiles, specialised services including financial, pharmaceutical products, machinery equipment and agriculture.
Japan is the world’s third largest economy and offers a diverse range of investment opportunities. Noted for its stable political system and economic management, it can offer several world leading companies to international equity investors in industries including automobiles, semiconductors, computers, machine tools, consumer electronics, ship building, pharmaceuticals, aerospace and petrochemicals.
Emerging markets, located in Latin America, Africa, Eastern Europe and Asia, offer the opportunity to invest in faster-growing economies, albeit with higher risk than in western developed markets. Many of them have favourable demographics with expanding middle classes, especially in Asia, supporting their long-term growth prospects.
Traditionally known for commodities and mining, emerging markets are increasingly embracing industries such as mobile technology (China), electronics (Taiwan, South Korea), information technology (India) and banking (Brazil) and could add value to many portfolios.
*Source: www.statista.com, January 2021
Liontrust's range of international equity funds
Liontrust offers a broad range of funds giving access to global, regional and single country markets. They are managed by four teams using different investment processes, but they are all actively managed funds based on high conviction approaches.
The Liontrust funds include:
Aims to deliver capital growth over the long-term using the Sustainable Future investment process. This process uses a thematic approach to identify the key structural growth trends that will shape the global economy of the future and the fund managers then seek to invest in well run companies whose products and operations capitalise on these transformative changes. The Fund invests in companies incorporated, domiciled or which conduct significant business in the in the European Economic Area and Switzerland, and can invest up to 5% in UK-listed stocks. Find out more
