Core funds and trusts for seven regions

Investors who prefer to focus on actively managed funds typically aim to structure their portfolio around a few reliable, broad-based, well-run investments with strong reputations; on to that “core” they may tack racier choices.  

For newcomers, a single “all in one” global or diversified multi-manager fund will likely do the trick, but as your portfolio grows you may decide to incorporate regional funds into your core holdings.  

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Together, these provide similarly broad coverage, but each brings a more specific focus and expertise.  

Indeed, some larger markets are best represented by a “pairing” of funds or investment trusts with complementary styles or targeting different parts of the market.  

We’ve asked a range of investment experts to suggest single funds or pairs that they believe offer great core exposure to the major regional markets globally.  

US  

The US is such a large and complex market, and so dominated by a handful of mega-growth stocks, that a pairing of complementary funds can work well as a reliable route to two notably different aspects of “core” exposure.  

Sheridan Admans of the research provider Infundly suggests combining a simple index tracker with an actively managed, value-focused option.  

“Fidelity Index US P Acc (BJS8SH1) fund provides the straightforward foundation: broad US equity exposure through a low-cost S&P 500 index tracker,” he observes.  

It’s partnered with the actively managed BNY Mellon US Equity Income GBP E Acc (BD84208) fund, which “looks very different from the index”.  

The focus here is on companies offering “attractive valuations, strong or improving fundamentals and identifiable catalysts, while maintaining an income and value discipline”.  

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As a consequence, it leans towards sectors such as financials, healthcare, energy and materials in preference to the highly valued technology names dominating the S&P 500. 

“The Fidelity tracker ensures you continue to participate in the companies driving the wider market, including the mega-cap technology leaders, while the BNY fund deliberately broadens the sources of return towards dividend-paying and more valuation-conscious businesses,” Admans explains.  

UK 

The UK market is an interesting proposition at present, having recovered to some extent from several years in the investment doghouse, but still offering undemanding valuations. 

It too is a strong candidate for a strategic pairing that can take advantage of the opportunities.  

Paul Green of the CT Global Managed Portfolio Trust considers Murray Income Trust Ord (LSE:MUT) to be a solid contender for core UK equity exposure.  

The trust has been run since early 2026 by Artemis’ highly regarded income team, which “is benchmark and style-agnostic and adopts a ‘cash-flow first, dividends second’ philosophy to enable sustainable income growth over time”.  

The success of this approach is evident in the excellent long-term track record of the open-ended Artemis Global Income I Inc (B5N9956) fund, regardless of whether growth or value styles are in vogue, and the same process is now followed for MUT.  

Green suggests pairing it with Fidelity Special Values Ord (LSE:FSV), a highly regarded value-biased UK equity trust which explores recovery opportunities for businesses across the market-cap spectrum.  

UK smaller companies in particular are emerging from a tough run; at investment trust consultancy QuotedData, senior analyst Matthew Read opts for the double act of Baillie Gifford UK Growth Trust Ord (LSE:BGUK) and BlackRock Smaller Companies Ord (LSE:BRSC).  

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BGUK backs exceptional businesses across the market-cap spectrum and stays with them as they grow.  

Read says: “It is a genuinely differentiated, high-active-share portfolio, while the board has been notably shareholder-friendly.”  

BlackRock Smaller Companies, meanwhile, gives more targeted exposure to the quality growth stocks in the UK’s small-cap arena.  

As Read explains: “There is a clear growth and mid/small-cap bias in this pairing, but within a diversified portfolio we see that as a strength: it gives investors access to an attractive part of the UK market with plenty of scope for active managers to add value and significant upside if sentiment continues to recover.” 

Europe 

Emma Bird, head of investment trust research at Winterflood, has JPMorgan European Growth & Income Ord (LSE:JEGI) as her choice for core continental exposure.  

JEGI’s target is long-term capital growth from a diversified portfolio of European stocks, with risk controls limiting divergence from the benchmark MSCI Europe ex UK index.  

“In our opinion, the managers’ commitment to a balanced investment approach is a key strength,” she says.  

“We note that potential upside could theoretically be limited by the reasonably low active share (around 50%) and the risk control framework; however, this has not held back relative returns in practice.”  

Indeed, JEGI has not only outperformed the benchmark index over the longer term, but has also topped its Association of Investment Companies (AIC) Europe peer group over the last one, three and five years.  

Bird points to “its ability to outperform in a range of market conditions” as key to its success. 

An additional attraction for investors seeking a core holding is the enhanced dividend policy, which targets a 4% annual payout. It means that even when capital growth is sluggish, there is some reward available.  

“We view the current 3.8% dividend yield as attractive, being notably the highest in the peer group, with the enhanced dividend policy making good use of the investment trust structure,” she adds.  

Japan  

Open-ended fund investors could consider the £3.3 billion Man Japan CoreAlpha Profl Acc C (B0119B5) as a strong actively managed option for Japan, says Gavin Haynes, an investment consultant at Fairview Investing.  

“It follows a well-disciplined, contrarian approach under the guidance of Jeff Atherton, who has been lead portfolio manager since 2021,” Haynes notes. “The fund has produced impressive returns versus both index and peer group.” 

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For investment trust enthusiasts, Bird suggests JPMorgan Japanese Ord (LSE:JFJ) Investment Trust as a core Japanese equity holding.  

At £1.2 billion, it is the largest Japan trust by some margin, with a focus on quality growth companies with the capacity to outperform over the long term.  

“The managers have a pragmatic investment approach, including an increased focus in recent years on companies embracing corporate governance reforms and on ‘new growth areas’ such as defence, which we think leaves the fund well-placed to perform well over the medium and long term,” she argues.  

Taipei at night. Taiwanese companies include well-known names such as TSMC.

Asia Pacific/Emerging Markets 

At CT Global, Green picks Schroder Oriental Income Ord (LSE:SOI) investment trust for sound core exposure to Asian markets. 

Returns are underpinned by a reliable income, currently almost 3%. 

“Manager Richard Sennitt focuses on companies that product dependable income, underpinned by quality cash flows and earnings,” Green notes. 

That has enabled the trust to raise dividends for the past 19 years, – making it leader of the 2026 AIC “next generation dividend heroes” list – despite the relative volatility of Asian equities themselves.

For broader emerging market coverage, he likes Fidelity Emerging Markets Ord (LSE:FEML). 

Backed by Fidelity’s global analysts team, the managers invest in quality, growth-focused emerging market equities. 

But while they emphasise stock selection as a key return driver, they also take macro considerations into account.  

They’re also active with their gearing levels. 

“Part of this gearing is used to take short positions in companies which they feel are low quality with weak fundamentals, and then look to benefit if the share price of the stock should fall,” Sennitt says. 

The short book has added meaningful levels of outperformance, he adds. 

China 

Many investors may prefer to access the Chinese market through a broader Asia fund where the manager makes judgements about its strengths relative to other countries in the region. 

But for those excited by the potential of this enormous economy and the power of its government to “make things happen”, Winterflood’s Emma Bird suggests the £1 billion Fidelity China Special Situations Ord (LSE:FCSS) investment trust as a stalwart pick. 

Bird highlights several attractions, including the manager’s experience and strong track record since taking over in 2014, “boots on the ground” in China itself, and an attractive and reliable dividend. 

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She also emphasises the importance of FCSS’ bias to smaller companies, with more than half the portfolio in companies worth less than £5 billion; that compares with just 6% for the benchmark index and is well ahead of most peers too.

“The allocation to small caps also makes good use of the investment trust structure, as does the investment in unlisted companies and the active use of gearing,” she adds. 

“While this means that performance can be volatile and may differ materially from the benchmark, we think that it also offers scope for significant outperformance over the long term.”

Haynes concurs on the attractions of a mid and small-cap bias. “For exposure to Chinese stocks, a passive or focused large-cap approach can mean investing in large state-owned enterprises and those skewed towards the domestic economy,” he explains. 

As an open-ended core choice, he picks Matthews China Innovators I GBP Acc (BJN4L97)  fund, which offers concentrated exposure to China’s emerging growth companies. 

“It favours small and mid-cap industrial-technology firms over the mega-cap internet names and state-owned companies that dominate the index,” he adds. 

India

The past couple of years have not been easy for investors in India, as the market has endured a painful correction after a prolonged bull run. 

But India’s youthful population and a dynamic, increasingly formalised economy, together with infrastructure investment and growing domestic interest in investing, are working together to create “a long runway for corporate earnings growth”, according to Matthew Read of QuotedData. 

He likes Ashoka India Equity Investment Ord (LSE:AIE) for broad, balanced core exposure to the Indian market. 

It invests across the market-cap spectrum and has built a well-diversified portfolio. 

Interestingly, it has no fixed manager fee; as Read explains: “the manager is only rewarded through a performance fee when AIE outperforms over a three-year period”. 

As an alternative in the open-ended arena, Haynes opts for M&G India. 

He points out that the fund combines an experienced manager (Vikas Pershad, with more than 20 years in Indian equities) with a well-disciplined approach. The focus is on “financially strong, quality companies trading on sensible valuations”. 

M&G India was only launched two years ago, so it has not yet built a track record; but as Haynes observes: “The strategy has a well-established institutional heritage”.