ISA ideas: around the world in 10 funds in 2025

Invest globally with these ideas from our Super 60 recommended list.

19th February 2025 09:43

By investing in open-ended and listed funds, British investors can easily take stakes in businesses from all over the world, from India and America, to China and beyond.

That’s incredibly important for diversification and returns. Just look at the difference between how American and UK shares have performed over the past 10 years: on a total return basis, the S&P 500 is up 304% and the FTSE All-Share index is up 84%.

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A year on from our last trip around the world, for the 2025 ISA season we take a fresh look at 10 expert-selected fund and investment trust ideas for different global regions and countries.

United States

At about two-thirds of a global stock market tracker fund, the US is an investment market that is difficult to ignore.

A savvy way to add US shares to a portfolio is via a tracker fund. One option our fund research team like is the SPDR S&P 500 Ucits ETF, which costs just 0.03% in annual fees. The accumulation version of the exchange-traded fund (ETF) has the stock market ticker SPXL, while the version which pays out dividend income is SPDR S&P 500 ETF GBP (LSE:SPX5).

Since 1990, the S&P 500 index has returned 3,814%, while the average actively managed investment fund in the IA North America sector has delivered 2,920% returns. A lot of this outperformance has come since 2014, when large US tech stocks began to grow more rapidly.

Be warned though, the S&P 500 is concentrated in “yesterday’s winners”, with 7% in Apple, 6% in Microsoft and 5.7% in Nvidia. However, there are plenty of reasons for these large technology firms to keep growing, despite their size.

To avoid this concentration in just a handful of companies, the Artemis US Smaller Companies is worth a look.

Owning none of the Magnificent Seven, this fund looks for small and mid-sized companies in the US.

The strategy tends to have more of a growth-style bias over a cycle, but the team do also consider value on a stock-by-stock basis.

Since the fund launched in 2014, manager Cormac Weldon has nearly kept pace with the S&P 500 index, returning 320%, albeit with more volatility.

China

China is the only other global superpower, but its shares make up just 3% of the FTSE All World index.

But there are a number of dedicated China funds that could earn a place in portfolios. One that our fund research team rate highly is Fidelity China Special Situations, an investment trust run by Dale Nicholls that holds both listed and unlisted shares.

Its top stocks include large companies such as Alibaba, Tencent and Meituan. However, versus the MSCI China benchmark, there is a bias to mid- and small-cap companies where the manager believes opportunities exist due to lack of coverage.

Dzmitry Lipski , head of funds research at interactive investor, says: “The trust benefits from an experienced and thorough manager in Dale Nicholls. He has proven ability in extracting value from a research team that is extensive and provides a high level of support in terms of idea generation and fundamental research.

“The trust is therefore viewed as a high-quality option in the China equity space, however, investors should also be aware of the heightened risks posed by small-caps, unlisted companies and the structural gearing.”

United Kingdom

British shares also deserve a place in investors’ portfolios. Not only do they trade at discounts to international peers, but their shares and dividends are priced in pounds, so investors are not exposed to foreign-exchange risk.

If you think that UK shares are undervalued, a way to double down is to back a fund manager who seeks out “value” shares.

Fidelity Special Values could fit the bill. Managed by Alex Wright since 2012, the process looks to identify unloved companies that have the potential to recover based on factors such as a business model/corporate change or industry cycles. The manager may buy into such situations at an early stage, which tends to result in a contrarian value bias.

Lipski says: “The thorough and well-defined contrarian value approach leads us to have a positive view on the fund’s investment process. Wright is an experienced manager with expertise in smaller-cap equity and we feel the fund is a strong option for investors seeking a contrarian and value-orientated approach to investing across the market-cap spectrum of the UK market.”

This approach leads to shares such as Imperial Brands, Reckitt Benckiser and NatWest. It does not own many of the more expensively price UK shares, like Unilever, RELX, and LSEG. The trust trades on a discount of -8%.

Japan

The second-biggest stock market represented in a global index, at about 6%, Japan is a relatively cheap market, packed with industrial and financial sector companies.

Man Japan Core Alpha features in our Super 60 list of fund ideas as an “adventurous” option.

The managers adopt a distinct value and contrarian bottom-up investment approach (focusing on company fundamentals) that is driven by the belief that cyclicality is a strong influence in virtually every sector of the market and that periods of underperformance are often followed by periods of outperformance.

This means that they tend to buy stocks when they are unloved and increase their weighting as the stock price falls further while remaining patient until the value is realised.

The fund is in the top 25% of performers in its peer group over one, three, five and 10 years, returning 159% over the past decade.

We also recommend an index fund, HSBC Japan Index, which charges just 0.13% in fees to track the 500 largest companies in Japan.

Over the past decade, it’s risen 118%, compared with 149% for the Man GLG active fund.

Europe

Europe is home to many world-leading companies, including in the technology, luxury goods and consumer staples sectors.

A fund seeking to capitalise on global giants listed in continental Europe is Fidelity European, managed by Marcel Stötzel and Sam Morse.

Its top holdings are semiconductor manufacturing equipment stock ASML, software group SAP, and pharmaceutical company Novo Nordisk.

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One key criteria for selection is dividend growth, which the managers view as a proxy for a well-run company. They also look for high barriers to entry and proven, cash-generative business models.

Lipski says: “The experience of the manager, the extensive analytical support and the proven nature of the investment process employed on this fund result in it being an attractive option for those wanting quality-growth exposure to Europe ex-UK equities.”

Fidelity European has risen166% over the past decade, ahead of the 123% return for its Europe ex-UK benchmark.

India

Another emerging global economy is India. With 1.4 billion people, it now has a larger and far younger population than China and its economy is growing faster too.

Its stock market has been a standout performer globally, with the MSCI India rising 71% over the past five years. But one fund has done even better, GS India Equity, rising 84%.

On our Super 60 list, it looks for fundamentally sound businesses at reasonable discounts to their intrinsic values.

Lipski says: “The robust bottom-up research process supplemented by the team’s expertise has helped them identify mispriced opportunities, especially among small- and mid-cap names, which account for roughly 40%-50% of the portfolio (versus 30% in the MSCI India Investable Market Index).

“These positions have yielded meaningful alpha over the years. The resultant portfolio is well diversified across 80–100 names and has shown a consistent growth tilt.”

Want to own it all in just one fund?

Then that’s possible by picking a global fund, which can be either actively or passively managed.

A passive option we like is the SPDR MSCI World Ucits ETF, which costs just 0.12% in fees. It tracks the MSCI World index, which only includes developed-world shares. This ETF has risen 80% over the past five years, driven higher by strong performance from US shares, which now account for 73% of the fund.

For an active approach, while maintaining a diversified portfolio, F&C Investment Trust may fit the bill. It has less in US shares, at 64%, and has more in the UK, at nearly 10%.

Manager Paul Niven uses a multi-manager approach by allocating stockpicking to internal managers at Columbia Threadneedle, where he works, but also by making use of third-party fund managers.

The trust has comfortably outperformed the MSCI World index over the past 20 years, returning 768% compared with 632% for its benchmark.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Please remember, investment value can go up or down and you could get back less than you invest. If you’re in any doubt about the suitability of a stocks & shares ISA, you should seek independent financial advice. The tax treatment of this product depends on your individual circumstances and may change in future. If you are uncertain about the tax treatment of the product you should contact HMRC or seek independent tax advice.

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