What changes have been made to the Favourite funds list - January 2026
We keep our Favourite funds list under constant review to ensure we have the highest conviction in the funds we’ve selected. Following a recent review, in the Global sector we have taken the decision to add the Dodge & Cox Worldwide Global Stock fund to the list. To accommodate the fund, we have taken the decision to remove the Schroder Global Recovery fund. Additionally, in Europe, we have taken the decision to remove the Barings Europe Select fund.
The disciplined investment approach behind the Dodge & Cox Worldwide Global Stock fund impresses, with a focus on identifying high-quality businesses that appear undervalued due to short-term disruptions, but where the team still see potential for long-term capital appreciation. We like the committee led approach at Dodge & Cox, with an emphasis on group management over individual leadership. We feel this ensures consistency, embeds robust succession planning, and brings together a blend of experience and perspectives. The Global Equity Investment Committee managing this fund is supported by a well-resourced analyst team with a varied range of experience and backgrounds.
The investment process leverages off Dodge & Cox’s capabilities by focussing on bottom-up fundamental company research, with the team seeking well-established businesses that have attractive sustainable earnings, strong cash flow prospects and valuations lower than the wider market. The resulting portfolio is diverse, typically consisting of 80-100 companies and will look very different to the benchmark given the team’s disciplined valuation approach. Pleasingly, the fund is ahead of its style adjusted benchmark, the MSCI ACWI Value index, since its launch in 2009 and has outperformed the broader MSCI ACWI index over 5 years to the end of November 2025. The stability of the team provides us comfort that they are well placed to continue to deliver positive returns going forward. Additionally, we believe the fund’s 0.63% OCF (ongoing charge figure) is very reasonable for active management in the sector.
To accommodate this addition, we have removed the Schroder Global Recovery fund from the Favourite funds list. This switch improves diversification within our global equity selections, given the overlap of investment process and underlying holdings between Schroder Global Recovery and Schroder Global Equity Income, which remains on the list. We continue to maintain conviction in the Schroder Value Team and their investment approach.
In Europe, we have taken the decision to remove Barings Europe Select. This decision reflects a decline in our confidence in the team’s ability to deliver long-term outperformance versus its benchmark, the MSCI Europe ex UK Small Cap Index. The team follows a GARP (Growth at a Reasonable Price) approach, focusing on businesses with durable franchises by assessing competitive advantages and their sustainability over time. Whilst we acknowledge that this style has been out of favour in recent years, particularly during 2025 to date, the scale of underperformance has been disappointing, especially when compared with peers who have fared better. Additionally, following a recent review we have conducted into customer demand across different asset classes the lack of customers investing in a dedicated European smaller companies fund was evident. We therefore no longer believe the asset class warrants a pick on the list.