Market volatility, such as that triggered in part by recent events in China, should be seen as an investment opportunity, in the view of Rob Lovelace, the lead manager for Capital Group’s New Perspective strategy. He believes that in such conditions, particularly, investors typically go back to basics and focus on companies that produce and develop goods and services that are needed in everyday life. These are businesses that will continue to prosper across all market conditions and can take advantage of changes in global trading patterns, developing into leading multinationals.
Beyond the home market
As markets have continued to evolve over the decades, we at Capital Group have identified that by recognising changes and embracing globalisation, we could find opportunities that other investors might miss. Our investment professionals look for companies that have a product, service or even an idea that has allowed them to grow beyond their home market. This factor is important as these businesses become less reliant upon the success of a single market.
We believe that as companies successfully grow beyond their home markets, they often possess diversified profit streams, innovative management teams and solid balance sheets. These could help such businesses prosper in healthy environments, but also mitigate downswings in tough times.
A new fund, a new perspective
We will be making our New Perspective strategy available to European and Asian investors for the first time on 30 October 2015 via a Luxembourg-domiciled fund (UCITS). The new fund will be managed by the same investment team and follow the same unconstrained, global investment approach as the strategy for US investors.
New Perspective is a benchmark-agnostic strategy that has a flexible remit to invest across the market cap spectrum. Key to finding investment opportunities is Capital Group’s on-the-ground research capability, which we have built up over many years. Capital Group’s investment professionals can draw on the expertise of more than 100 equity analysts based in 11 locations globally1, who work collaboratively to seek out the best opportunities at attractive valuations.
The portfolio is built from the bottom up, security-by-security, with a focus on blue-chip-quality companies that are well positioned to take advantage of market changes and global secular trends. These will be businesses that are broadly diversified across different geographies and have outgrown their home markets. These companies typically have the added experience of working in multiple currencies, regulatory and political environments and economies.
Fundamental to the New Perspective strategy is a focus on where companies do business, not where they are headquartered. It’s an approach that we call the New Geography of InvestingSM. As Rob Lovelace remarks, “Why wouldn’t you want to invest in the best company wherever it happens to be based? Why would you use country of domicile as a filter for determining what to invest in?”
A robust and unique process
New Perspective is brought together through The Capital SystemSM, which underpins all Capital Group’s strategies. Each portfolio is divided into portions and then managed independently by our experienced investment professionals. This allows them to focus on their individual highest conviction ideas, combined together in one portfolio. It is a team approach that allows for group discussion, and so limits the risk associated with isolated decision-making. Capital Group also has a multi-layered governance structure to ensure that the system operates effectively.
New Perspective’s global mandate allows the strategy’s portfolio managers to uncover the best investment opportunities wherever these may occur. It offers investors a flexible, global investment approach based on ‘best ideas’. This provides a portfolio with a diversified stream of investment returns that can help smooth out returns for investors over the long term.
Capital Group is one of the world’s largest and most experienced active investment management firms, with US$1.4 trillion of assets under management2.
To find out more about the New Perspective strategy, please click here
1 As at 31 December 2014. The Capital Group companies manage equities through three investment divisions that make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organisation; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.
2 As at 30 June 2015. Source: Capital Group
FOR PROFESSIONAL INVESTORS ONLY
American Funds are not registered for sale outside the United States. Past results are not a guarantee of future results.
This communication is issued by Capital International Limited (authorised and regulated by the UK Financial Conduct Authority), a subsidiary of the Capital Group Companies, Inc. (Capital Group). This communication is intended for professional investors only and should not be relied upon by retail investors. While Capital Group uses reasonable efforts to obtain information from sources which it believes to be reliable, Capital Group makes no representation or warranty as to the accuracy, reliability or completeness of the information. This communication is not intended to be comprehensive or to provide investment, tax or other advice.
Risk factors you should consider before investing:
• The value of shares and income from them can go down as well as up and you may lose some or all of your initial investment.
• Past results are not a guide to future results.
• If the currency in which you invest strengthens against the currency in which the underlying investments of the fund are made, the value of your investment will decrease.
• The Prospectus and Key Investor Information Document set out risks, which, depending on the fund, may include risks associated with investing in emerging markets and/or high yield securities.
• Emerging markets are volatile and may suffer from liquidity problems.
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