Every portfolio needs its difference-makers

Of course, they're stars for a reason – and it would be remiss if we didn't talk about them.

Indeed, in recent years, a relatively small group of companies – including the so-called Mag 7 – has been responsible for a large share of global equity market returns.

It's not hard to see why.

These businesses have become synonymous with some of the most powerful trends shaping the global economy. Artificial intelligence continues to drive demand for computing power and semiconductors. Electrification is increasing the market for critical minerals and energy infrastructure. Digital connectivity has become essential to almost every aspect of modern life.

For many investors, these are the companies capturing the imagination and generating the returns.

The players who make the team tick

But that’s not why we’re here. Let’s shine a light on the rest of the team – the players providing stability at the back, controlling the midfield and doing the hard yards that often go unnoticed.

Every good portfolio needs those kinds of operators.

Credit investments, for example, can offer a source of income and may help dampen volatility during periods of uncertainty. While they rarely generate the same excitement as high-growth equities, they often play an important role in balancing risk within a portfolio.

Real estate brings exposure to the physical economy. From logistics warehouses supporting e-commerce to data centres powering the digital world, it offers access to assets that many of us rely on every day. Investors are also attracted to the potential for income and inflation protection alongside the prospect of capital appreciation.

Emerging markets bring a different dynamic. Faster-growing economies, evolving consumer bases and expanding middle classes can provide access to themes that may be less prevalent in developed markets. Think of a bank expanding financial access across North Africa, or an energy firm that distributes electricity safely and efficiently to rural communities in Guatemala. These are the little-known companies that could become giants of the future, while offering return potential today. 

Private markets have also become increasingly important for investors seeking diversification. Whether through infrastructure projects, lending directly to businesses or investing in companies before they reach public markets, they can provide access to opportunities beyond traditional stock exchanges. They can also provide sources of return that are less correlated with public markets and, for many investors, have become a core part of portfolio construction.

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