Big global fund shifts stance on tech

GQG Partners has established a distinctive approach to global equity investing, characterised by high-conviction portfolio positioning and a willingness to take significant active positions relative to the benchmark.

This approach has been particularly evident in its positioning over the past year and provides a useful insight into the flexibility of GQG’s investment process and the extent to which the managers are prepared to adjust high-conviction views as their assessment of the underlying fundamentals changes.

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Managed by Rajiv Jain, the GQG Partners Global Equity fund seeks quality-growth companies across global markets. GQG takes a broad view of quality that can extend beyond traditional growth sectors, including energy when fundamentals and valuations are attractive. 

The fund’s objective is to provide strong returns to investors while managing downside risk over a market cycle. Jain, who serves as chief investment officer, cofounded GQG Partners in 2016 following a long and successful period at Vontobel Asset Management. At GQG, he has assembled an impressive team of around 20 analysts and co-managers with a diverse range of skills.

What does the fund invest in?

In the search for high-quality businesses for the portfolio, Jain and his team assess financial strength, competitive advantage and valuation, believing that a fundamental driver of share prices is a company’s earnings over the long term. The process starts with traditional fundamental investment analysis but is supported by less conventional methods, leveraging in-house specialisms in forensic accounting, as well as employing former investigative journalists.

There is also a key emphasis on wider economic trends that define regional and sectoral positioning in the portfolio. Where Jain and the team interpret economic and market data as implying strong structural growth or deterioration in a given sector, they are prepared to rotate the portfolio quickly to reflect their change in view and take a highly active approach to fund management.

The portfolio tends to comprise around 50 names (currently 61), and its composition can, at times, differ greatly from its benchmark, the MSCI All Countries World Index (MSCI ACWI). Currently, there aren’t any extreme divergences from the index from a geographical perspective. Two of the largest overweight positions are the UK and Brazil, which are each just over three percentage points overweight. The fund’s largest exposure is to the United States, which accounts for 62.4% of the portfolio.

Where there is a notable divergence from the index is at sector level. The portfolio is now skewed in favour of technology at 39.9%, a nine percentage point overweight, while holding smaller overweight positions (three percentage points) in energy 6.7% and utilities at 5.2%. The technology exposure is reflected in several of the fund’s highest-conviction holdings, with NVIDIA Corp (NASDAQ:NVDA), Microsoft Corp (NASDAQ:MSFT), Alphabet Inc Class A (NASDAQ:GOOGL) and Amazon.com Inc (NASDAQ:AMZN) now among its four largest positions.

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The technology overweight is a recent development, with the sector accounting for 39.9% of the portfolio at the end of August, compared with just 12.5% three months earlier. This represents a significant and rapid change in positioning, particularly given GQG’s previous caution over technology and AI-related stocks, which were characterised as exhibiting decelerating revenue growth and collapsing free cash flow in a research piece titled Dotcom on Steroids, published in September 2025.

The rotation reflects a more constructive view of high-quality technology companies, particularly hyperscalers and semiconductor businesses. GQG believes these areas have become more attractively valued following the recent derating, while margins have remained stronger than anticipated. In its view, valuations now better reflect the concerns around the scale of AI spending that the team had previously identified.

How has the fund performed?

From inception up until early 2025, the strategy had built a strong performance record versus its benchmark and peers, with its ability to protect capital and reposition the portfolio proving particularly valuable during periods of market disruption.

This was particularly evident in 2022. Having entered the year with more than 20% in technology, GQG rapidly reduced its exposure to low single digits and increased its allocation to energy to close to 30%. The fund subsequently returned 4.4%, compared with an 8.1% fall for the MSCI ACWI, as higher interest rates weighed heavily on growth stocks while energy companies benefited from higher commodity prices. The fund also performed well in 2024, returning 21.3% compared with 19.6% for the MSCI ACWI and 15.0% for its peer group.

The more recent performance picture has been considerably weaker. In 2025, the fund fell 9.5%, while the MSCI ACWI returned 13.9%, as its cautious stance towards technology and AI-related stocks became a significant headwind as the sector continued to perform strongly. Performance has remained challenging since then, with the fund returning 5.9% over the past year, compared with 12.2% for its peer group and 21.9% for the MSCI ACWI.

The weakness is also evident over longer periods. Over three years, the fund has delivered an annualised 7.5%, compared with 12.0% for peers and 17.8% for the benchmark. The five-year annualised return of 7.3% remains ahead of the peer group at 5.0%, although it is well behind the benchmark at 11.2%. The deterioration in relative performance reflects the cost of GQG’s cautious positioning towards technology during a period in which the sector, and particularly AI-related stocks, drove a significant proportion of global equity market returns.

Source: Morningstar Total Returns (GBP) to 31/08/2026. Past performance is not a guide to future performance. 

Why are we highlighting this fund?

GQG offers a differentiated approach to global equity investing, combining fundamental stock research with a willingness to make significant changes to the portfolio as its investment views evolve. 

The fund focuses on companies with strong balance sheets, competitive advantages and attractive long-term growth prospects, while taking a benchmark-agnostic approach to portfolio construction.

The managers’ willingness to make large sector and stylistic calls is a defining feature of the strategy. The portfolio can therefore look very different from both its benchmark and peers, as demonstrated by the significant shifts between technology, energy and other sectors in recent years. This flexibility has helped the fund navigate some difficult markets, although its recent underperformance also highlights the risks associated with taking sizeable positions away from the benchmark.

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The fund is particularly topical given the recent reversal in its technology positioning. The rapid increase in exposure, following a prolonged period of caution towards the sector, provides an opportunity to assess whether GQG’s ability to adapt can translate into improved relative performance. Investors should appreciate that such pivots are part of the investment philosophy and process of GQG, and the likelihood of timing such decisions in perfect alignment with broader market rotations is low. 

GQG’s value is in the deep analyst and manager resource and experience underlying these changes and a record of success at the helm of the portfolio should give investors some faith in the managers’ ability to outperform once more.

The fund’s factsheet can be viewed here. 

Please note, the fund highlighted was selected using the Highly Rated Funds Tool. For more investment ideas, explore The Highly Rated Funds tool. The information provided should not be considered a personal recommendation.