There are a few dimensions to how we think about which investors the Lighthouse Global Equity Fund might suit.
Firstly, the Fund has a growth focus, and so should suit investors who are looking for higher returns over the medium to long-term. The Fund targets returns, after fees, that are at least 2% pa above the return from the MSCI All Country World Index. Over the last five years (from March 2016 to March 2021) that target rate of return has averaged 14.5% pa, in New Zealand dollars. To date we’ve comfortably beaten that target rate of return, but there’s the usual proviso that past performance is no guarantee of future performance.
Secondly, the Fund invests in global equities, and so should suit investors who are looking to include some exposure to global equities in their portfolio. Although the Fund invests in equities that are listed on the major United States exchanges in practice that captures both United States companies that have global operations and also large companies from outside the United States that list there because of the depth and status of those markets.
These same dimensions also help to highlight which investors the Lighthouse Global Equity Fund might not suit.
The Fund is unlikely to pay scheduled distributions. Investors who are seeking a regular income can still receive that by periodically selling down their investment in the Fund, which is quite straightforward, but we don’t expect the Fund to pay a dividend.
The Fund will also likely prove to be more volatile than other funds that predominantly invest in assets such as cash, bonds or property. Share markets are very liquid, and their prices reset quickly to take into account new developments and news. That’s great when the prices are going up, but can be emotionally testing when the markets are going through their occasional falls. It can also be problematic for those investors who need to know they will have a very specific amount of money in the near-term.
But if you’re an investor who’s looking for attractive long-term returns, or wants to increase their exposure to the global economy, then talk with your financial advisor about whether an investment in the Lighthouse Global Equity Fund might suit your portfolio.