Today’s equity markets seem to be characterized by uneven economic cycles, divergent central bank policies, and frequent leadership rotations across regions and sectors. In this environment, relying too heavily on any single market can potentially increase concentration risk and amplify volatility. A global equity fund — defined as a fund with an equity strategy that invests across multiple regions, worldwide, without being overly concentrated in any single country — can help form a more balanced portfolio foundation.
Global equity exposure may be beneficial in the current market environment because it can:
- Provide access to multiple economic cycles. Economies do not generally expand or contract in unison. Global exposure allows investors to participate in growth where conditions are most favourable at any given time.
- Reduce concentration risk. Diversifying across countries and regions may help mitigate the impact of political, regulatory, or commodity-driven shocks that can affect individual markets.
- Offer exposure to world-leading companies. Corporate leadership and innovation span the globe, across sectors such as technology, healthcare, industrials, and consumer brands.
- Support participation in long-term global themes. By investing globally and focusing on bottom-up stock selection, investors may be better positioned to participate in long-term structural themes such as digitalisation, AI adoption, and evolving supply chains, which transcend regional boundaries.
- Potentially smooth outcomes during market transitions. Portfolios with diversified regional and sector exposures may be better positioned to adapt to shifting macroeconomic and policy environments.
For investors seeking a single vehicle to access diversified global equity exposure, the JPMorgan Global Select Equity Active ETF (TSX: JGLO) provides an example. The ETF invests across North America, Europe, Japan, and select emerging markets, with flexibility to allocate meaningfully across regions while avoiding excessive concentration in any single market. Supported by a global research platform, the strategy selects companies across the value, growth, and quality spectrums.
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