Looking to diversify beyond the ASX? Global equity funds offer access to international markets and new opportunities - but not all funds are created equal. This guide helps you cut through the noise and compare the best options.
Global equity funds invest in international companies across regions like the US, Europe, and emerging markets. They’re ideal for investors seeking long-term growth and diversification beyond Australia.
Global equity funds are investment funds that pool investor money to buy shares in companies across multiple countries. Unlike domestic funds that focus on Australian equities, global equity funds spread their holdings across developed and emerging markets.
They are typically categorised by:
By including global equity funds in your portfolio, you can gain exposure to world-leading companies like Microsoft, Apple, Nestlé, Samsung, and LVMH, depending on the fund’s focus.
If you’re looking to diversify beyond the Australian market, global equity funds can play a crucial role in achieving a more balanced and growth-oriented portfolio.
These funds offer a powerful way to diversify your investments across geographies, sectors, and currencies - giving you access to industries and innovations that may not be available locally.
In particular, there are five benefits of investing in global equity funds worth focusing on:
Investing globally helps local investors reduce overexposure to domestic risks. A downturn in the Australian economy, for example, may not affect markets in the US or Europe to the same extent. Diversified portfolios tend to generate smoother, more consistent long-term returns.
Global equities offer exposure to the world’s fast growing companies. In fact, many of the world’s most dynamic companies are listed outside of Australia. Think tech in the US, luxury goods in Europe, and ecommerce in Asia.
Foreign currency returns can enhance fund returns when managed strategically. Global equity funds offer this potential.
Global equity funds are professionally managed. They have the scale and insights to research, select, and monitor hundreds of international companies.
Global equity funds are able to access liquid investment opportunities from all around the world, which ensures fund liquidity risk is on the low side.
Bottom line: Global equity funds allow you to participate in global growth stories while reducing the concentration risk of an Australia only portfolio. In the words of global equity manager Magellan:
‘Investing in global equities can provide exposure to some of the world’s best companies, diversification, and the potential for long-term growth.’
All investments come with risks, and global equity funds are no exception. While they broaden investors’ exposure, they also introduce specific risks to consider.
Here are the main risks to be aware of:
International markets can be just as volatile as domestic ones, especially during geopolitical tensions or global economic slowdowns. The resulting fluctuations in stock markets worldwide can lead to declines in fund values which are influenced by investor sentiment.
Since global equity funds invest in assets denominated in various currencies, fluctuations in exchange rates can impact returns positively or negatively. For this reason, some global equity funds are hedged to ensure their returns aren’t impacted by currency movements.
Some international markets may have low trading volumes, making it harder for fund managers to buy or sell their funds’ securities without impacting price.
Economic or political issues in particular countries or regions can disproportionately affect investments in those areas. For example, the risk of investing in U.S. equities rose in response to Trump’s tariff policy.
Global economic downturns, inflation, or changes in interest rates can negatively impact corporate profits and stock prices worldwide.
Changes in government policies, regulations, or political stability in different countries can affect markets and specific companies within those markets.
Thinking that global automatically means a portfolio is diversified is a common mistake investors make. For example, some global funds heavily favour US tech stocks, which can create unintentional sector concentration.
Tip: Don’t just look at the word ‘global’ in the title - review a fund’s underlying holdings and strategy to understand its exposure and diversification.
There are eight main global equity fund strategies to be aware of:
For a typical high-net-worth investor in Australia:
⚠️ Always review the PDS and understand the risk profile before investing.
With dozens of global equity funds available to Australian investors, how do you pick the one that fits your needs?
The answer lies in understanding your objectives and knowing what to look for under the hood.
In summary, there’s no universal ‘best’ global equity fund for all investors.
Global equity funds can be a useful investment tool - but only when matched to the right strategy.
Some investors prefer low-cost global ETFs for broad market exposure, while some seek actively managed global equity funds for the potential outperformance on offer.
And others opt for a mix of both active and passive global equity funds to blend lower costs with targeted exposure.
What matters most is clarity around your investment goals and a willingness to compare the options carefully.
Always read a fund’s Product Disclosure Statement (PDS) and consider seeking financial advice from a licensed professional.
Tip: Use fund analysis tools like InvestmentMarkets and Morningstar to research equity funds based upon their performance, risk, and fees.
This table is intended as a quick-reference guide to help match your personal investment goals with the most suitable global equity fund or alternative strategy.
Start by clarifying what matters most to you—whether it’s growth, income, diversification, or downside protection - then use the checklist to evaluate fund features that align with those priorities. From there, explore the table to identify other investment options that may complement or enhance your portfolio. This approach helps ensure every allocation decision supports your broader financial objectives with clarity and confidence.
| If your priority is... | Consider... | Why? |
| Long-term capital growth | Global equity growth funds | Exposure to global innovation and growth sectors such as tech |
| Reliable income or dividends | Global equity income funds | Designed to pay consistent yields from global blue-chip stocks |
| Downside protection / volatility control | Global long/short equity funds | Aims to profit in rising and falling markets; adds portfolio resilience |
| Thematic trends | Thematic global equity funds (e.g. tech, ESG) | Lets you express convictions or align with investment megatrends |
| Higher return potential from under-researched areas | International small-cap or emerging market funds | Higher risk, but greater potential for alpha in less efficient markets |
| Inflation-hedged real asset exposure | Global infrastructure funds or international REITs | Cash flow plus potential price appreciation tied to real assets |
| High-growth, long-term capital growth | Global private equity or venture capital funds | Illiquid, private market opportunities with potential for substantial returns |
| Reducing foreign currency risk | AUD-hedged versions of global funds | Minimises return volatility caused by FX movements |
By way of example, here are the top performing global equity funds available to Australian investors based on 5-year returns:
Here are the costs of investing in these same top-performing funds:
Tip: focus on each fund’s total cost ratio rather than its management fee to ensure fund expenses are included.
⚠️Always review a fund’s PDS and understand its risk profile before investing.
Global equity funds aren’t just for market veterans - they’re a smart, scalable way for Australian investors to access the best international growth opportunities, diversify away from local risks, and tap into world-leading industries. But they’re not a one-size-fits-all solution.
Ask yourself:
If you answered ‘yes’ to most of these questions, global equity funds may be a valuable addition to your investment portfolio - particularly if you’re aiming for long-term growth and broader market exposure.
Whether you’re a retiree seeking international dividend income, or a self-directed investor building a future-focused portfolio with exposure to international companies, there’s a global equity fund that will align with your goals.
Global equity funds open the door to global opportunity - but the key is aligning them with your personal goals.
Final tip Take your time. Compare global equity fund strategies, fees, regional exposure, and risk profiles. And when in doubt, consult a licensed financial adviser.
Global equity funds invest in companies worldwide — including Australia — while international equity funds exclude your home country. For Australian investors, that means international funds avoid ASX-listed stocks, whereas global funds may include them as part of a broader strategy.
If a global fund is unhedged, its returns will be affected by movements between the Australian dollar and the currencies of the countries where the fund invests. A strong AUD can reduce overseas returns when converted back, while a weaker AUD can enhance them. Hedged funds aim to smooth this out by hedging out their currency exposure.
Yes, many global equity funds are designed to generate reliable dividend income. These funds invest in established international companies with strong balance sheets and consistent pay-out histories. Look for funds specifically labelled as ‘global equity income’, such as Plato Global Shares Income Fund.
Management fees vary based on a fund’s strategy. Passive index funds may charge as little as 0.18% p.a., while actively managed funds can charge 1% p.a. or more.
In addition to management fees, check the MER (Management Expense Ratio), which represents a fund’s annual operating expenses, and evaluate whether its performance justifies its total costs over time.
Generally, yes — but it depends on the fund. While global equity funds provide geographic diversification, many are still heavily weighted toward the US market or specific sectors (like tech). Always review a fund’s top holdings and regional breakdown to ensure it matches your diversification goals.
Absolutely. Global equity funds, whether they be managed funds or ETFs, are commonly held within Self-Managed Super Funds (SMSFs). Just ensure that any investment aligns with your SMSF’s investment strategy, complies with ATO regulations, and is documented in your fund’s records. As always, please seek financial advice before you make specific investment decisions.
Start with comparing funds’ 3- and 5-year annualised returns, but also look at risk-adjusted metrics like the Sharpe ratio and volatility. Compare each fund against its relevant benchmarks such as the MSCI World Index. Use the fund's fact sheet and independent platforms like InvestmentMarkets and Morningstar to assess performance consistency and manager track record.
The Pengana WHEB Sustainable Impact Fund invests in companies with activities providing solutions to sustainability challenges.
The Fund’s objective is to outperform the MSCI All Country World ex-Australia Net Total Return Index in Australian dollars over rolling 5 year periods.
The TT Global Environmental Impact Fund aims to generate strong long-term returns by investing in the leading global structural growth theme – the green transition.
Companies are staying private for longer and the fund provides access to a portfolio of leading, privately owned growth companies.
The Fund aims to provide investors with long-term capital growth through investment in quality global shares (For Wholesale Investors Only).
The aim of the fund is to achieve sustainable returns from capital growth, targetting 20% p.a.
The Fund aims to achieve absolute returns in excess of the benchmark over the investment cycle (typically 3-5 years).
The Fund employs Contrarius’ valuation-based, contrarian investment philosophy and aims to achieve long-term returns higher than the benchmark, without greater risk of loss.
The Fund uses an all-weather investment style that seeks to deliver consistent alpha over the cycle.
The Fund is highly focussed on investing in long-term winners in attractive transforming markets when they are undervalued and offer outsized return potential.
The Fund invests via a select number of actively-managed global equity managed funds that incorporate responsible investment criteria into their processes.
The Fund invests in global listed equities that contribute to a meaningful reduction in climate change. (Wholesale Investors Only)
The Fund’s objective is to deliver global equity-like returns over rolling 5 year periods, while providing downside protection for severe market falls, to deliver beneficial results over the full cycle.
The Fund aims to outperform the MSCI All Country World Index over the investment cycle (typically 3-5 years).
The Pengana Harding Loevner International Fund invests in high-quality, growing companies identified through fundamental research with a long-term, global perspective.
