The third way investors participate in global markets is through UCITS, or what we refer to as global funds.

These are professionally managed funds where a fund manager decides which companies to buy and how the portfolio should be constructed. Instead of selecting individual stocks yourself, you invest in units of the fund, and the fund manager manages the underlying portfolio.

Essentially, it’s the concept of mutual funds in India. But of course, with some difference. Will explore that as we proceed.

Now, UCITS stands for Undertakings for Collective Investment in Transferable Securities.

It is a regulatory framework used widely in Europe that allows funds to be distributed across multiple countries under a common set of investor protection rules. Because of this structure, UCITS funds are commonly used by global asset managers when offering international investment strategies.

For investors, the important point is that with global funds, a professional investment team is responsible for researching companies, constructing the portfolio, and adjusting it over time.

Think of an investor who believes that global technology will continue to drive economic growth, but does not want to analyse individual companies like Nvidia, Microsoft, or Adobe.

Instead of selecting those companies one by one, the investor could allocate money to a fund such as the Fidelity Global Technology Fund. The fund manager studies companies across the global technology ecosystem and builds a portfolio of businesses they believe are positioned well for the future.

Another example could be an investor who wants exposure to Chinese companies but is unsure which specific businesses to choose.

Rather than researching companies individually, the investor could invest in a strategy such as the Fidelity China Focus Fund, where the portfolio manager actively selects companies listed in China or companies that derive significant revenue from the Chinese economy.

In both cases, the stock selection process is with a professional manager. Again, a very similar structure to mutual fund schemes operates within India.

This approach appeals to investors who prefer a managed portfolio and a clearly defined investment strategy, rather than tracking and selecting companies themselves.