New Perspective strategy | Capital Group

The New Perspective Strategy:

Built for an Evolving World


The prospects for global integration have become less certain amid rising populism and geopolitical tensions. Technological revolution, another disruptive trend, has also profoundly impacted individuals as well as industries and economies. Changes like these created a spectrum of challenges, but at the same time brought about investment opportunities.

Capital Group's New Perspective strategy, which has experienced more than four decades of market cycles, is well positioned to benefit from these changing patterns of world trade.

Globalisation at a turning point

The pace of globalisation is gaining speed and cutting through market and political noises around the world. Here are the key trends that the New Perspective managers are keeping a close eye on.

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As at 30 June 2017. Source: Capital Group. Past results are not a guarantee of future results. Investment involves risks. The value of an investment and the income received from it can go down as well as up.

Positioned to benefit from the changing face of globalisation

In the current economic environment, it is important to not just benefit from growth in world trade, but also to benefit from changing patterns of world trade. To do that, the New Perspective strategy invests in global companies that are well positioned to take advantage of secular growth trends and innovation.

Chart-1

The digital transformation knows few boundaries and are changing the economics of doing businesses across borders. Beneficiaries of this investment theme are companies that can benefit from the development of the global digital economy and the 'Internet of Things':

  • Social media and advertising company Facebook
  • Technology giant Alphabet
  • Media and e-commerce conglomerate Naspers

 

Source: TeleGeography, Global Bandwidth Forecast Service

Chart-2

E-commerce, powered by the rapid rise in technology, is reshaping the supply chains of companies and forcing them to be located near end markets. The New Perspective portfolio managers like companies with distribution networks that cannot be replicated as well as unique brands that have high barriers to entry:

  • Online retailer Amazon
  • Online travel services company Priceline

 

Sources: Cyber Monday and Black Friday figures via Adobe Digital Insights and Singles' Day’s figures via CNBC/Alibaba, as at Nov 2016

Chart-3

The new global consumer has spending power and is changing consumption patterns across the world. China, the largest e-commerce market in the world, is one important market that the New Perspective strategy is focused on. The strategy invests in companies that are well positioned to capture the growing demand of global consumers and changing consumer behaviours:

  • Consumer goods giant Nestlé
  • Insurer AIA
  • Cruise operator Norwegian Cruise Line

 

Source: Capital Group internal sources and Starbucks, as at December 2016

Chart-4



People are living longer and the world is ageing. The demand for medical drugs and treatments continues to grow and this is a multi-decade investment theme. Companies that fit into this theme focus on areas of unmet medical need that have leading drugs or treatments with long growth runways, and have track records in drug innovations:

  • Innovative biotechnology and pharmaceutical companies such as Incyte and Regeneron Pharmaceuticals

 

Sources: Historical population data and projections (1950-2050) were accessed via OECD's Demography and Population database at https://stats.oecd.org on 29 August 2016 and Euromonitor (spending power of consumers aged 60 and older)

Capital Group New Perspective Fund (AU): A time-tested approach capturing the potential of global secular themes

 

  • A global approach
    The fund's global mandate allows portfolio managers to pursue pockets of growth, secular trends and global trade patterns wherever these may occur.
  • Multinational bias
    We think the best way to capture these trends is by investing in quality companies across the market cap spectrum that we believe have the potential to develop into leading multinationals.
  • Multiple perspectives
    Capturing these trends require globally integrated research and multiple perspectives. Our organisation is aligned to this and our portfolio is built with only our highest-conviction ideas.

 

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  1. Source: TeleGeography, Global Bandwidth Forecast Service.
  2. Sources: Cyber Monday and Black Friday figures via Adobe Digital Insights and Singles' Day's figures via CNBC/Alibaba, as at  Nov 2016.
  3. Source: Capital Group internal sources and Starbucks, as at December 2016.
  4. Sources: Historical population data and projections (1950-2050) were accessed via OECD's Demography and Population database at https://stats.oecd.org on 29 August 2016 and Euromonitor (spending power of consumers aged 60 and older).
     

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