Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Naturally, choosing the right stocks isn’t that easy. Getting it right requires lots of time spent researching. And that’s where the magic of investment funds comes in. For a small fee, an investment trust is managed by professionals who have all day to research and pick the perfect mix of stocks.

With that in mind, I’ve uncovered three investment trusts from around the world that have outperformed the S&P 500 over the past five years.

The best of the best in Europe?

Up 70.3% in the past five years, Blackrock Greater Europe Investment Trust (LSE:BRGE) is only just beating the S&P 500. This is because it’s largely focused on European stocks that don’t perform quite as well as their US counterparts. However, the fact that it’s maintaining equal growth with the S&P 500 is impressive.

The fund provides exposure to the leaders of European industry like pharma giant Novo Nordisk and semiconductor manufacturer ASML, along with global luxury brands like Ferrari and LVMH.

However, some believe EU economic growth is limited by high labour costs and a very strict regulatory environment. While this helps to reduce volatility, it also results in sluggish productivity. The S&P Global Eurozone GDP forecasts were recently reduced to 1.3% in both 2025 and 2026, down from 1.5% and 1.4%, respectively.

The world’s largest market

Up 82.9% in the past five years, India Capital Growth Fund (LSE:IGC) is doing slightly better than the S&P 500. As the country with the world’s largest population, India is an often-overlooked opportunity for UK investors. Yet its stock market has outperformed the majority of developed and emerging global markets over the past two decades.

The fund provides exposure to the nation’s leading businesses, although many are largely unheard of outside of the country. It’s weighted towards finance (22%), consumer discretionary (21%), industrials (14%) and materials (14%). 

However, with no diversification outside of the country, it would be heavily affected by a slump in the local economy. It’s been doing well so far but there’s no guarantee the economy will continue to grow. The country’s top talent tends to migrate abroad, leaving local businesses struggling to maintain a skilled workforce.

The booming US tech industry

Up 106.2% in the past five years, Polar Capital Technology Trust (LSE:PCT) is far outperforming the S&P 500. Most likely this is because it’s focused almost exclusively on the top-performing tech stocks in the S&P 500 like Nvidia, Apple and Microsoft. As such, it provides exposure to all the best bits of the index without the lower-end stocks bringing down the overall average.

At the same time, it lacks the kind of diversification that’s critical during a market slump. Tech stocks tend to fall in unison when things go south, so this fund is prone to high volatility and sudden drops. I myself would balance this fund in an ISA along with other funds to avoid this risk.

The post 3 market-beating international investment funds for a Stocks and Shares ISA appeared first on The Motley Fool UK.

APAX predator

Closed-ended investment trust APAX Global Alpha (LSE: APAX) invests 59% of its money in global private equity funds run by Apax Partners, which manages more than €40bn in total across its operations, and the remaining 41% in a tailored mix of derived investments. Roughly two-thirds of the fund is invested in the tech & telco and services sectors, with the remainder in healthcare and consumer. This £729m trust is 48% invested in the North America, 31% in Europe, 10% in India, 4% in the UK and 2% in China.

Recent performance has been strong, with the fund up 17% in the past 12 months, on top of a yield of 5.44%. However, today’s unaudited interim results for the half year ended 30 June disappoint as currency headwinds halted recent strong growth. 

Naff NAV

APAX Global Alpha posted a negative total net asset value (NAV) return of 0.7%, as the euro strengthened 8% against the US dollar. On a constant currency basis, NAV growth was positive at 4.2%. Adjusted NAV fell by €30.6m to €908.1m, due to adverse FX movements and the 2016 dividend payment of €23.8m. 

Apax Global Alpha chairman Tim Breedon said the portfolio continues to demonstrate strong fundamentals despite the setback. “Due to FX headwinds, the headline performance was weak however the outlook is positive as AGA’s Investment Adviser continues to realise value in a relatively young portfolio and is finding investment opportunities against a challenging market back drop.” That may be true but performance looks even more underwhelming when I compare it to one of my favourite global investment companies, Scottish Mortgage Trust, which recently delivered a 38.1% rise in NAV.

India calling

I have done well from my stake in Jupiter India, which is up 20% over the past 12 months, and 158% over five years, according to Trustnet. However, I would have done even better with India Capital Growth Fund (LSE: IGC) which is up 29% over the past year, and 160% over five. The investment trust has just published its interim results for the six months to 30 June with the highlight a 23.8% leap in NAV to £124m, giving net gains of £24m. Now that’s how to do it, APAX.

The share price increased by 27.7% to 93.25p over the year, while its two largest holdings, Dewan Housing and Federal Bank, soared 79.4% and 68.8% respectively. The AIM-quoted company is now seeking a listing on the main London market.

Discount delight

A rising tide is lifting all funds and India has been boosted by Prime Minister Modi’s reform agenda, which continues to attract investors, including strong overseas inflows of $8.5bn and another $3.3bn from domestic mutual funds. Still, you have to catch that tide, and India Capital Growth’s certainly did that.

Interestingly, it still trades at a whopping discount to NAV of -19.75%. If that hasn’t narrowed after recent successes it may never do so, but it does offer protection against further widening. If you believe the India tide can rise even higher, this fund could be a good way to ride it.

The post 2 high-growth funds thrashing the market right now appeared first on The Motley Fool UK.