Institutional investors are starting to switch to the MSCI all-country world index from the MSCI world index because of the advantages of investing in a broader portfolio, according to John Bell, who chairs fund manager Newton’s global model team. The latter index includes only stocks from developed countries, whereas the former also encompasses emerging-markets equities.
Although 20 percent of assets are to be invested in the developing world in Newton’s model portfolio, Bell thinks that this amount is bound to grow. He points out that a sector position makes much more sense than a geographical one in terms of investment.
To invest globally, an investor needs a view of what’s going on in the world. This idea drives Newton’s strategy and its organization of global sector analysts, regional specialists and portfolio managers handling around £24 billion ($37.5 billion) in assets. Yet every team member is based in London.
— Global Money Management
