Rathbone Global Opportunities

Since James’s appointment in November 2003, Rathbone Global Opportunities has performed well, outpacing the broader global stock market, meaning investors who backed the fund from that point have earned much higher returns than if they had simply tracked the market through a passive fund.

As the fund focusses on companies with strong growth potential, it has historically tended to perform best when investors have favoured a broad range of innovative, fast-growing businesses. This was particularly the case in 2020 during the COVID lockdowns, when everyday life, from ordering food and clothes, attending doctors’ appointments, running a business, working from home or communicating with the outside world moved online almost overnight. Investors were thus keen to back the companies enabling this shift to a more digital economy, such as e-commerce platforms for their necessities, software that enabled working from home, or digital payment providers that made online and contactless payments easier.

Conversely, Rathbone Global Opportunities has tended to struggle when stock market returns have been driven by companies benefiting from specific economic conditions, such as in early 2022, when energy companies boomed because of the global energy crisis triggered by the outbreak of the war in Ukraine. James and Sammy generally avoid investing in companies whose success depends largely on factors outside their control. The fund has also struggled when returns have been dominated by a small number of stocks linked to a single investment theme. This has notably been the case with artificial intelligence (AI) in recent years. While the fund still managed to outperform the wider market during the early stages of the AI boom, it has struggled since 2024, as more and more of the stock market’s gains have come from an increasingly small number of AI-related companies. Although James and Sammy do invest in some companies that are benefiting from the growth of AI, they do not want the fund to rely too heavily on a single trend so therefore don’t own each one that have done well.

Overall, this has weighed on the fund’s performance in recent years, but it also means that Rathbone Global Opportunities could be well placed if market gains broaden out to more companies, whether within AI or across different themes, rather than remaining concentrated in a small handful of names.

Source: Morningstar
Past performance is not a reliable indicator of future results

James and Sammy look for companies that have the potential to grow faster than the market expects, aiming to spot tomorrow’s household names before they become widely recognised. The businesses they back should have a clear, realistic path to growth, achieved without straining their finances or relying too heavily on borrowing. They also look for businesses that can grow through their own efforts, rather than depending on favourable economic conditions or specific, one-off events.

To make the portfolio more resilient, particularly during rocky periods in the stock market, James and Sammy also invest in some companies that will likely grow more slowly but offer greater predictability. Across the board, though, every company they invest in should be easy to understand, boast advantages that competitors will find hard to replicate, and be able to adapt as the world changes.

Given this focus, Rathbone Global Opportunities tends to have more exposure to higher-growth areas such as technology, industrials, and consumer-oriented businesses, which can often benefit from innovation and long-term changes in the economy and society. Conversely, the fund typically has less exposure to areas where companies’ future prospects are harder to predict, such as energy or mining.

Source: Rathbones Asset Management

From a geographical perspective, the fund mainly invests in the US, UK, and Europe, as the managers have more expertise in major developed markets outside of Asia. Conversely, it typically has little or no exposure to Japan and emerging markets. This gives it solid exposure to many of the world's major developed markets, and therefore could also work well alongside funds more focussed on regions like Asia or Latin America.

• Avoiding sectors where companies tend to have low-growth or hard-to-predict prospects means the fund will likely miss out on returns when these sectors dominate returns in the wider market.
• Lack of exposure to emerging markets and Japan means the fund will miss out on gains from these regions.
• Could struggle when market returns are driven by a single, specific trend.