Best global equity funds to watch in 2026

Understanding global equity funds

Global equity funds invest in company shares across multiple countries and regions worldwide, providing investors with diversified exposure to the international stock markets.

Unlike funds focused on a single country or region, these funds can invest anywhere in the world, including both developed and emerging markets. This approach means your investment isn't tied to the fortunes of any single economy, potentially reducing concentration risk while capturing growth opportunities across the globe.

When you invest in a global equity fund, you're essentially buying a stake in a professionally managed portfolio that might contain anywhere from 50 to several thousand different companies.

These could range from American technology giants like Apple and Nvidia to European luxury brands, Japanese manufacturers and emerging market innovators. The fund manager or index methodology determines which companies to include and in what proportions.

These funds come in two main varieties:

1. Actively managed funds — employ professional fund managers and research teams who make decisions about which stocks to buy, when to buy them and when to sell. These managers conduct detailed company analysis, meet with management teams, and use their expertise to identify opportunities they believe will outperform the broader market. The goal is to beat a benchmark index through skilled stock selection and market timing. However, this expertise can be expensive, with fees typically ranging from 0.75% to 1.5% or even higher.
2. Passive index funds — rather than trying to beat the market, they aim to match it by tracking a specific global market index such as the MSCI World or FTSE All-World. These funds use computer algorithms to replicate the index's holdings in the same proportions, requiring minimal human intervention. This simplicity allows them to charge much lower fees, often between 0.1% and 0.3%. The trade-off is that you'll never beat the market, but you also won't underperform it due to poor stock selection.

The debate between active and passive investing has intensified in recent years. Research consistently shows that most active fund managers fail to beat their benchmark indices over the long term, particularly after accounting for their higher fees.

This has driven the surge in passive investing, though advocates for active management argue that skilled managers can still add value, particularly in less efficient markets or during periods of market stress.

How these funds work in practice

When you invest your money into a global equity fund, your capital is pooled with that of other investors. The fund uses this collective pot to purchase shares in companies around the world. You receive units or shares in the fund itself, which represent your proportional ownership of the underlying portfolio.

The value of your investment fluctuates based on the performance of the companies held within the fund. If the fund holds 500 different stocks and most of them rise in value, your fund units become more valuable. Conversely, if the markets fall, so does your investment. Most global equity funds are priced once per day, typically at the end of the trading day.

Global equity funds can generate returns in two ways. First, through capital growth as the share prices of the underlying companies increase, and second, through dividend income when the companies in the portfolio distribute profits to shareholders.

Some funds automatically reinvest these dividends to purchase more shares (accumulation funds), while others pay them out to investors (income funds). The choice between these depends on whether you want to maximize long-term growth or receive regular income from your investment. For example, retired investors are often invested specifically in passive global equity funds for their relatively reliable income.

It's important to understand that global equity funds are designed for long-term investing, typically a minimum of five years. This timeframe allows you to ride out short-term market volatility and benefit from the long-term growth potential of global stock markets, which have historically delivered average annual returns of around 7-10% over extended periods.

However, past performance is not a guarantee of future results.

Top global equity funds of 2025

The following were some of the best performing funds in 2025, attracting some of the largest inflows on the market. We have only considered funds with assets over £10 billion given the need for liquidity and long-term security with this type of asset class.

Vanguard FTSE Developed World ex-UK Equity Index

The Vanguard FTSE Developed World UCITS ETF tracks the FTSE Developed World ex-UK Index, providing UK investors with broad exposure to developed market equities outside their home country. The fund holds stocks from companies in North America, Europe, and Asia Pacific, with the United States typically representing the largest allocation.

The ex-UK approach is particularly popular with British investors who often already have substantial UK exposure through their domestic investments or pensions. This preference stems from multiple factors: they may feel comfortable investing in companies they encounter in day-to-day life, such as high street retailers or utility providers, but lack the expertise, confidence, or familiarity needed to evaluate foreign markets and companies.

Additionally, currency risk, different regulatory environments and the complexity of researching overseas businesses can make international investing feel daunting.

By adopting an ex-UK global fund, these investors can enjoy international diversification without duplicating their existing UK holdings, reducing home bias. With Vanguard's characteristically low fees, this fund offers a cost-effective way to gain international equity exposure without the higher charges associated with active management.

The fund grew from £18 billion to £21 billion, with about £500 million from new investors and £2.5 billion from market gains.

Fidelity Index World

The Fidelity Index World Fund remains a common choice for capturing global equity returns due to its low cost passive strategy. By tracking the MSCI World Index, the fund provides efficient exposure to large and mid-cap stocks across 23 developed markets, covering approximately 85% of each country's free float-adjusted market capitalisation.

In 2025, the fund delivered a solid total return of 13%, closely mirroring its benchmark's 12.8% gain. It charges an industry-leading 0.12%, which helps minimise the tracking drag often seen in more expensive funds.

The fund aims to hold almost all 1,350+ index constituents in their exact proportions. Due to rapid growth in the tech sector, the portfolio is now heavily weighted toward the United States and technology with mega-cap leaders like Nvidia, Apple and Microsoft at the helm.

The substantial inflows seen throughout 2025 demonstrate a clear market shift. Investors are increasingly opting for these predictable, low-cost trackers over active managers who often struggle to justify higher fees with consistent outperformance.

This fund grew from circa £11 billion to circa £14 billion, with roughly equal contributions from new investor money and market performance.

WS Purisima Global Total Return PCG

The WS Purisima Global Total Return fund takes a distinctive approach to global equity investing. Rather than simply buying and holding stocks, this fund employs a total return strategy sometimes uses derivatives and short positions to generate returns in both rising and falling markets.

The fund's management team focuses on capital preservation alongside growth, making it potentially interesting for investors seeking equity exposure with somewhat lower volatility than traditional equity funds.

The fund's ability to be more defensive during market downturns while still participating in upside potential has appealed to investors seeking a more sophisticated approach to global equity investing.

This fund grew from £11 billion to £14 billion last year, with around £1.1 billion from new investors the remainder from investment performance.

How global equity funds compare to other investment styles

When comparing global equity funds to other investment approaches, several key differences emerge:

Regional funds focus on specific geographic areas such as Europe, Asia or North America. While these can offer higher returns if a particular region outperforms, they lack the geographical diversification of global funds and carry higher concentration risk.

Sector-specific funds invest in particular industries like technology, healthcare, or energy. These can deliver strong returns when a sector is booming but can be highly volatile and risky compared to the balanced approach of global equity funds.

Bond funds invest in fixed-income securities rather than equities. While typically less volatile than equity funds, they generally offer lower long-term growth potential, making them more suitable for conservative investors or those nearing retirement.

Multi-asset funds combine equities, bonds, and sometimes other assets like property or commodities. These offer even broader diversification than global equity funds but may deliver lower returns during strong equity market periods due to their more conservative asset allocation.

The choice between these approaches depends on your investment goals, risk tolerance and time horizon. Global equity funds occupy a middle ground, offering substantial growth potential through equity exposure while spreading risk across the world's major economies.

Pros and cons of global equity funds

As with all investing products, there are advantages and drawbacks.

Pros of global equity funds

• Instant diversification — a single fund provides exposure to hundreds or thousands of companies across different countries, sectors and currencies, reducing the risk associated with individual markets or economies
• Professional management — investors in active funds benefit from expert stock selection and ongoing portfolio management without needing to research the individual companies themselves
• Access to growth opportunities — global funds can capitalise on growth in emerging markets and innovative companies worldwide that might be difficult for individual investors to access directly
• Currency diversification — holding assets denominated in multiple currencies can provide some protection against currency fluctuations

Cons of global equity funds

• Higher fees — particularly for actively managed funds, ongoing charges can eat into returns over time. Annual fees typically range from 0.1% for passive index funds to 1% or more for active funds
• Currency risk — while diversification can be beneficial, currency fluctuations can also create volatility and reduce returns when foreign currencies weaken against sterling
• Market concentration — many global equity funds are heavily weighted toward US stocks and large technology companies, which means they may not provide as much diversification as you might at first expect
• Performance uncertainty — with active funds, there's no guarantee that fund managers will outperform the market, and many fail to beat their benchmark indices after fees

Global equity funds summed up

• Passive investing dominated 2025, with global equity index funds proving more popular than actively managed alternatives for the first time since 2015, as investors increasingly valued low costs and broad market exposure
• However, some active funds continued to see huge inflows, demonstrating appetite for quality active management despite the broader trend toward passive investing
• More and more investors appear to be seeking simple, cost-effective global diversification
• Investors should consider their individual circumstances when choosing between these funds, weighing factors such as cost, active versus passive management, geographic focus and whether they prefer a single-fund solution or building their own portfolio from individual holdings