2025 fund picks: Dodge & Cox Worldwide Global Stock Fund

The Dodge & Cox Worldwide Global Stock Fund - one of Tom Stevenson’s fund picks for 2025 - has a value-focused approach to the international equity market. Compared to the main indices it is significantly underweight the US, while being overweight in cheaper areas like the UK and Europe.

Tom says that the management team has lived through many cycles and demonstrates evidence of a consistent process and long-term investment skill, hence its inclusion in Fidelity’s Select 50 list of handpicked funds. He suggests that the portfolio – with its average price to earnings ratio of 12.1 − offers a lower risk exposure than a global tracker would provide in today’s concentrated market.

Objective and approach

Dodge & Cox Worldwide Global Stock is a core international equity fund that invests in the developed and emerging markets. The managers aim to build a diversified portfolio of medium-to-large, well-established companies that appear to be temporarily undervalued, but have a favourable outlook for long-term growth.

Their stock selection decisions are based on a number of different factors including: a company’s financial strength; economic condition; competitive advantage; quality of the business franchise; environmental, social, and governance (ESG) issues; as well as the reputation, experience and competence of its management.

The underlying portfolio

At the end of December the portfolio consisted of 93 companies from 19 different countries with the ten largest positions accounting for 24.6% of the assets. These included the likes of: Charles Schwab, Alphabet, Sanofi, Charter Communications and GSK¹.

Top-10 holdings

1. Charles Schwab
2. Alphabet
3. Sanofi
4. Charter Communications
5. GSK
6. Fiserv
7. HDFC Bank
8. RTX
9. Johnson Controls International
10. FedEx

Source: Dodge & Cox, 31 December 2024 

The largest country weightings were the US 48.7%, Developed Europe ex UK 19.1%, Emerging Markets 13.5% and the UK 8.6%. Although it was the biggest allocation, America was by far and away the main underweight given that it makes up 66.8% of the MSCI All-Companies benchmark².

Dodge & Cox’s value focus really comes through in the portfolio statistics, with the fund having a forward price to earnings ratio of 12.1x compared to 18x for the index and a price to book of 1.8 versus 3.3. This suggests that it could hold up fairly well if the more expensive parts of the market like the US tech sector come under pressure³.

Performance

Over the 10 years to the end of December 2024, the GBP Accumulating share class made an average annual total return (net of fees) of 10.04%⁴. This was comfortably ahead of the 9.23% achieved by its benchmark (in USD), despite the dominance of growth stocks for much of the decade.

What are the managers’ latest views?

Writing in their latest update at the end of December, the managers said that they remain focused on uncovering attractive investment opportunities through their fundamental, bottom-up research and price-disciplined approach⁵.

“We continue to be optimistic about the long-term outlook for the fund, which is diversified across a broad range of sectors and investment themes. The fund trades at an attractive valuation of 12.1 times forward earnings, compared to 18 times for the MSCI ACWI.”⁶

How do the costs stack up?

The ongoing charges are 0.63% per annum, which is fairly typical for an actively managed international fund and is neither cheap nor expensive.

Who is it suitable for?

Dodge & Cox Worldwide Global Stock would be a sensible choice for an investor with a long time-horizon of ten years or more. It has a distinct value approach, so would work well alongside a more growth-oriented international equity mandate.

More on Dodge & Cox Worldwide Global Stock Fund

Past performance is not a reliable indicator of future returns

Source: Morningstar, total returns from 31.12.19 to 31.12.24. Excludes initial charge.

Source:

^1,2,3,4 Dodge & Cox, factsheet, 31 December 2024
^5,6 Dodge & Cox, investment commentary, 31 December 2024

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Overseas investments will be affected by movements in currency exchange rates. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. The fund may use financial derivative instruments for investment purposes, which may expose the fund to a higher degree of risk and can cause investments to experience larger than average price fluctuations. The fund invests in emerging markets which can be more volatile than other more developed markets. The fund has or is likely to have, high volatility owing to its portfolio composition or the portfolio management techniques. The Key Investor Information Document (KIID) / Key Information Document (KID) for Fidelity and non-Fidelity funds is available in English and can be obtained from our website at www.fidelity.co.uk. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.