The global equity benchmark excludes many opportunities as the industrial advantage shifts to the so-called emerging economies. This paper challenges the conventional belief that history is the best guide to determine the optimal composition of the international equities component of a portfolio. It examines why it makes sense to structure an investment portfolio that emphasises global themes and relationships, as opposed to geographic regions. It looks at how a thematic approach to investing identifies the major secular, cyclical and structural influences on the world’s stock markets, and how consistency, risk control and diversification are managed.

Topics a...