At first glance, global share markets can seem unpredictable. You might see one fund performing strongly while another appears to lag, even though both are investing in global companies. Over time, those roles can reverse just as quickly.
This can raise questions about whether something has gone wrong. In reality, it reflects how global equity investing works.
Global equities aren’t a single, uniform investment. They include a range of strategies, each focused on different types of companies.
Some of the most common approaches or investment styles include:
Markets don’t move in a straight line. As conditions shift, so does investor focus.
At times when interest rates are rising or economic growth is improving, value-oriented companies can become more appealing. In contrast, when interest rates are low and stable, growth stocks often move back into favour. During periods of uncertainty, companies with reliable earnings and strong fundamentals can be more resilient.
These shifts don’t happen on a set schedule, but over time there is a clear pattern that no single strategy stays ahead indefinitely.
Short-term results can make one part of the market look far stronger than another, but that view doesn’t always reflect what’s happening underneath.
At any point it is likely to see some strategies experience lower returns while others, including specific sectors or themes, performing strongly.
In many cases, this comes down to changing expectations, shifts in sentiment or new ideas gaining attention. It doesn’t necessarily mean the underlying businesses have become stronger or weaker.
Global equity strategies are generally designed to be held over longer periods, often for five years or longer.
Over shorter timeframes, returns can be uneven and influenced by factors that don’t always reflect the strength of the businesses themselves.
Differences between strategies can feel more noticeable, especially when one area of the market is in focus.
Given more time, economic cycles have a chance to play out and company fundamentals become more influential. A broader range of opportunities can contribute to returns, helping smooth out the variation seen in the short-term.
Learn more about why your investment timeline matters.
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Each fund includes a minimum suggested timeframe that indicates how long it’s typically intended to be held. Comparing short-term results against a long-term strategy can give a misleading picture. Looking at returns over the suggested timeframe can help you better understand performance of the fund over time rather than reacting to short-term market volatility. |
It can be tempting to respond to what has just happened in the market.
A common pattern is moving away from a strategy after it has underperformed or shifting into areas that have recently delivered strong results. While this can feel like a logical reaction, it often leads to decisions being made at the wrong time.
Over time, this behaviour can result in poorer long-term performance due to selling after prices have fallen and buying after they have already risen.
Looking at the bigger picture can help cut through the noise. Different strategies are expected to perform differently and periods of underperformance are a normal part of the process.
At its core, investing isn’t about trying to pick which strategy will perform best next. It’s about making sure your investments are aligned to what you’re trying to achieve and staying consistent as markets inevitably shift.
Rather than reacting to short-term performance or moving with every change in the market, focus on an approach that reflects your goals, your timeframe, and your comfort with risk. From there, the role of your investment strategy is to work through different market conditions.