Key Takeaways
- Emerging markets and UK stocks have outperformed global markets in 2025 so far.
- Investors are questioning their exposure to US markets.
- Market sentiment has stabilized after the US and China agreed trade terms in the summer.
2025 has proven to be a volatile year for global markets, dominated by ongoing concerns around US tariff policy and heightened geopolitical tensions. Despite the broader uncertainty, emerging markets and the UK have stood out as relative outperformers: in the year to Nov.6, the Morningstar Emerging Markets Index is up nearly 30% in US dollars, while the Morningstar UK Index has posted robust gains of around 22% in pounds. This compares with a 20% gain for the Morningstar Global Markets Index in dollars.
A key driver of the recovery since April was the agreement on a new tariff framework between the US and China, which helped stabilize sentiment not only in China but across global markets more broadly.
For much of the past decade, regional diversification has not been a major concern for investors. However, 2025 has highlighted a shift in that dynamic. The growing unpredictability of US policymaking has raised doubts about the continued dominance of American stocks, reinforcing the importance of global diversification.
Our Picks Among Global Equity Funds
Morningstar analysts hold high conviction in the following core global equity funds.
- JPM Global Select, Silver
- Veritas Global Focus, Silver
- M&G Global Sustain Paris Aligned, Bronze
JPM Global Select
Silver-rated JPM Global Select is one of the best core global equity strategies around. Led by veteran manager Helge Skibeli, with support from Christian Pecher, the strategy benefits from J.P. Morgan’s deep bench of around 80 experienced sector analysts.
The managers focus on premium and quality companies that typically operate in structurally attractive industries, exhibit durable competitive advantages, maintain strong balance sheets, and generate reliable cash flow. Portfolio construction is conviction-driven, resulting in a relatively concentrated portfolio of 65—95 holdings, with a maximum active weighting of 3% per stock. The managers also retain the flexibility to deviate up to plus or minus 5% at an industry level and plus or minus 10% at a regional level. Turnover is generally high, typically 50%—100%, reflecting the team’s willingness to reallocate capital as valuation signals evolve. While this creates a more actively managed profile, portfolio oversight is robust.
Since Skibeli took over in December 2015, performance has been strong, outperforming both its category average and the MSCI World index. While slightly more volatile when compared with peers, the strategy has delivered superior risk-adjusted returns.
Veritas Global Focus
Silver-rated Veritas Global Focus has been managed by Andrew Headley since its 2003 inception, providing consistent leadership and stability. He is now supported by Mike Moore (joined 2014) and Ian Clark (added in 2023), forming a cohesive trio managing the firm’s global equity strategies.
The strategy prioritizes capital preservation and long-term growth through a disciplined, quality-focused, and valuation-conscious approach. It invests in a concentrated portfolio of 25—40 high-conviction stocks, supported by a team of nine analysts conducting deep fundamental research. The managers exercise patience, waiting for attractive valuations before investing and are willing to hold cash when suitable opportunities are limited.
This prudent approach has successfully mitigated downside risks, enabling the strategy to perform well across various market conditions and deliver strong risk-adjusted returns over its long history.
M&G Global Sustain Paris Aligned
Bronze-rated M&G Global Sustain Paris Aligned is led by seasoned manager John William Olsen, who brings nearly 30 years of investment expertise. The strategy is supported by a dedicated team of 10 analysts and M&G’s broader equity resources.
The investment process focuses on fundamental, quality-driven analysis, targeting companies with economic moats and sustainable business models. Valuation discipline guides the team to buy during short-term price setbacks. The fund also aligns with the Paris Agreement by maintaining portfolio emissions at least 50% lower than its benchmark.
Since Olsen’s appointment in 2014, the strategy has consistently ranked in the top quartile of its peer group, delivering long-term outperformance primarily through strong stock selection. Although its concentrated nature can lead to single-stock risk and occasional short-term underperformance, the fund’s patient, research-intensive approach has proven effective over time.
