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Emerging markets

Access the growing potential of emerging markets

Emerging markets (EMs) matter and we believe their importance and potential benefits to investors will only increase in the future.

Although currently less than 17% of the global market cap1, emerging markets represent almost 40% of global GDP2 and are responsible for driving almost 70% of global GDP growth3.

EMs have also developed, broadened and deepened – now consisting of more than 60 different countries, with varying fundamentals, different economic growth patterns and often widely diverging valuations. This offers investors a wider set of opportunities.

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In this video, some of our emerging market-focused portfolio managers discuss their outlook on the region and its growing importance in the years to come.

Data as at 31 March 2017. 
1 EM proportion of the total equity market cap of MSCI All Country World Index (MSCI ACWI) after the removal of free-float. Source: RIMES
2 Source: International Monetary Fund: World Economic Outlook Database
3 Growth forecasts based on p
urchasing power parity. Source: International Monetary Fund: World Economic Outlook Database

Access the growing potential of emerging markets via a less volatile route 

Capital Group Emerging Markets Total Opportunities (LUX) (CGETOP) 

Created for investors who are attracted to the long-term growth potential of EM, but want a less volatile pattern of returns

 

Power of choice: a multi-asset approach that offers the flexibility to invest across the full spectrum of the EM investable universe 

A less volatile route into EM: CGETOP’s flexible approach has helped provide a smoother pattern of returns during periods of volatility

A proven track record from a pioneer in EM investing: CGETOP has delivered EM growth with less volatility over 9 years4

In this video, portfolio manager Luis Freitas De Oliveira discusses how Capital Group’s Emerging Markets Total Opportunities strategy offers a potentially lower volatility route into emerging market investing, and the different ways the strategy can fit into client portfolios.

Past results are not a guarantee of future results.
Capital Group Emerging Markets Total Opportunities (LUX) (CGETOP), after fees and expenses based on the Z share class as a representative share class with a current maximum Total Expense Ratio (TER) of 102.5bps, has achieved a cumulative return of 26.8% vs. 9.4% for the MSCI Emerging Markets Investable Market Index with net dividends reinvested (in US$ terms). This is for the period 1 February 2008-31 March 2017. Sources: Capital Group, MSCI.
4 Over the period 1 February 2008-31 March 2017, CGETOP had volatility of 9.6% p.a. vs. 20.5% p.a. for the MSCI Emerging Markets Investable Market Index with net dividends reinvested. Volatility is based on daily observations, using a population standard deviation calculation. Sources: Capital Group, MSCI

 

There from the beginning

30 years investing in emerging markets

A pioneer in emerging markets
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December 2016

A pioneer in emerging markets

Thirty years ago, the World Bank invited Capital Group to create the world’s first emerging market equity fund. In this video, some of our EM-focused portfolio managers remember the early days and the challenges associated with investing in the region.

Watch Video (02:07)

December 2016

The importance of a research-driven approach in emerging markets

Emerging markets comprise a vast and diverse set of opportunities. In this video, some of our EM-focused portfolio managers underline the importance of deep research and how it can help unearth these opportunities.

Watch Video (02:17)

December 2016

The evolution of emerging markets

In this video, some of our emerging market-focused portfolio managers discuss how emerging markets have evolved over time to become one of the most dynamic areas of global investing. 

Watch Video (01:56)

December 2016

Emerging markets - part of a long-term investor’s porfolio

In this video, some of our emerging market-focused portfolio managers discuss how emerging markets should be an important part of a long-term investor’s portfolio.

Watch Video (02:15)

December 2016

Emerging markets outlook

In this video, some of our emerging market-focused portfolio managers discuss their outlook on the region and its growing importance in the years to come.

Watch Video (01:48)

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Thirty years ago, the World Bank invited us to create the world's first emerging markets equity fund

Knowledge gained through decades of experience leads to a deeper understanding of the unique complexities inherent in emerging markets.

All data as at 30 June 2016. Emerging Markets Growth Fund is a US-domiciled open-end interval fund generally offered to institutional investors and other qualified purchasers in the US by Capital International, Inc. Source Capital Group

30 years investing in emerging markets

December 2016

A pioneer in emerging markets

Thirty years ago, the World Bank invited Capital Group to create the world’s first emerging market equity fund. In this video, some of our EM-focused portfolio managers remember the early days and the challenges associated with investing in the region.

Watch Video (02:07)

December 2016

The importance of a research-driven approach in emerging markets

Emerging markets comprise a vast and diverse set of opportunities. In this video, some of our EM-focused portfolio managers underline the importance of deep research and how it can help unearth these opportunities.

Watch Video (02:17)

December 2016

The evolution of emerging markets

In this video, some of our emerging market-focused portfolio managers discuss how emerging markets have evolved over time to become one of the most dynamic areas of global investing. 

Watch Video (01:56)

December 2016

Emerging markets - part of a long-term investor’s porfolio

In this video, some of our emerging market-focused portfolio managers discuss how emerging markets should be an important part of a long-term investor’s portfolio.

Watch Video (02:15)

December 2016

Emerging markets outlook

In this video, some of our emerging market-focused portfolio managers discuss their outlook on the region and its growing importance in the years to come.

Watch Video (01:48)

A pioneer in emerging markets

Thirty years ago, the World Bank invited us to create the world's first emerging markets equity fund

Knowledge gained through decades of experience leads to a deeper understanding of the unique complexities inherent in emerging markets.

All data as at 30 June 2016. Emerging Markets Growth Fund is a US-domiciled open-end interval fund generally offered to institutional investors and other qualified purchasers in the US by Capital International, Inc. Source Capital Group


Integrated resources around the world give better insight

Going off the beaten track to gather insights
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Few asset managers can match the scale and the scope of our proprietary research effort. This allows us to uncover the best investment opportunities for our clients.

Boots on the ground EM countries we visited in 2015

em-bootsmap

As at 30 June 2016

68

EM analysts across our global network

43

equity analysts

14

fixed-income analysts

11

macroeconomists

All data as at 31 December 2016, unless otherwise stated. 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. Source: Capital Group

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At Capital Group, our research isn’t just limited to meeting with companies and government officials. We believe research is about developing a high-conviction edge using multiple tools. Our system encourages analysts to go beyond traditional research and explore new avenues to gain an insight into a country’s economy and politics.
em-sragen

"In Indonesia, I happened upon a place called Sragen, where the local leader, or Bupati, was held in high regard for his insightfulness, management skills and lack of corruption. For several years, I went there to see what kind of change was happening on a local level.”

 

 Chapman Taylor - Emerging market equity analyst

 

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. The information provided is intended to highlight issues and not to be comprehensive or to provide advice.

Integrated resources around the world give better insight
Few asset managers can match the scale and the scope of our proprietary research effort. This allows us to uncover the best investment opportunities for our clients.

Boots on the ground EM countries we visited in 2015

em-bootsmap

As at 30 June 2016

68

EM analysts across our global network

43

equity analysts

14

fixed-income analysts

11

macroeconomists

All data as at 31 December 2016, unless otherwise stated. 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. Source: Capital Group

Going off the beaten track to gather insights
At Capital Group, our research isn’t just limited to meeting with companies and government officials. We believe research is about developing a high-conviction edge using multiple tools. Our system encourages analysts to go beyond traditional research and explore new avenues to gain an insight into a country’s economy and politics.
em-sragen

"In Indonesia, I happened upon a place called Sragen, where the local leader, or Bupati, was held in high regard for his insightfulness, management skills and lack of corruption. For several years, I went there to see what kind of change was happening on a local level.”

 

 Chapman Taylor - Emerging market equity analyst

 

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. The information provided is intended to highlight issues and not to be comprehensive or to provide advice.

 

Other routes to invest in emerging markets


Capital Group New World Fund (LUX)

Capital Group Emerging Markets Debt Fund (LUX)
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Looking beyond traditional boundaries to capture the rise of developing economies


Capital Group has been a pioneer in EM since the 1980s and in 1999 launched the New World (NW) strategy, which focuses on the growth in developing economies from a multidimensional, global perspective – combining local EM businesses with global multinationals that have significant exposure to developing economies. We believe this can offer investors a more resilient way to capture the potential of EM investing – since its launch, the strategy has outpaced both EM and global equities.*
The strategy is now available to investors as a Luxembourg-domiciled fund (UCITS).

Introducing the Capital Group New World strategy

In this video, Capital Group portfolio manager Nick Grace introduces the New World strategy. He discusses how the strategy differs from a traditional emerging market equity approach, portfolio construction and the opportunities that the strategy seeks to benefit from.

Past results are not a guarantee of future results.

As Capital Group New World Fund (LUX) launched on 28 October 2016, a meaningful track record has yet to be established, so the investment results shown here are for the Capital Group New World Composite (defined as a single group of discretionary portfolios that collectively represent a particular investment strategy or objective). This is intended to illustrate our experience and capability in managing this strategy over the long term. Our Luxembourg fund has been a member of this composite since the beginning of November 2016.

* Data as at 31 December 2016. Returns for Capital Group New World Composite (7.6% p.a.) vs. MSCI Emerging Markets Index (7.0% p.a.) and MSCI All Country World Index (4.1% p.a.) over the strategy’s lifetime (30 June 1999 to 31 December 2016) in US dollar terms. New World: The results shown for the Capital Group New World Composite are asset-weighted and based on initial weights and monthly results. For illustrative purposes the figures used are net of management fees and expenses from a representative Luxembourg fund share class (Z), calculated with a Total Expense Ratio (TER) of 102.5bps. MSCI EM: With net dividends reinvested. Prior to 31 December 2000, MSCI Emerging Markets Index with gross dividends reinvested. MSCI ACWI: With net dividends reinvested. Prior to 31 December 2000, MSCI All Country World Index with gross dividends reinvested. Sources: Capital Group, MSCI

This information supplements or enhances required or recommended disclosure and presentation provisions of the GIPS® standards, which if not included herein, are available upon request. GIPS is a trademark owned by CFA Institute.

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A proven approach to managing an evolving asset class

Capital Group’s Emerging Markets Debt (EMD) strategy has the flexibility to invest across the broad EMD universe, so has the potential to capture the full range of opportunities and can help to mitigate the risks inherent in this asset class.

Bond opportunities in Argentina, India offer sharp contrast

Capital Group portfolio manager Rob Neithart discusses the contrasting bond opportunities he is finding in Argentina and India.
Capital Group New World Fund (LUX)

Looking beyond traditional boundaries to capture the rise of developing economies


Capital Group has been a pioneer in EM since the 1980s and in 1999 launched the New World (NW) strategy, which focuses on the growth in developing economies from a multidimensional, global perspective – combining local EM businesses with global multinationals that have significant exposure to developing economies. We believe this can offer investors a more resilient way to capture the potential of EM investing – since its launch, the strategy has outpaced both EM and global equities.*
The strategy is now available to investors as a Luxembourg-domiciled fund (UCITS).

Introducing the Capital Group New World strategy

In this video, Capital Group portfolio manager Nick Grace introduces the New World strategy. He discusses how the strategy differs from a traditional emerging market equity approach, portfolio construction and the opportunities that the strategy seeks to benefit from.

Past results are not a guarantee of future results.

As Capital Group New World Fund (LUX) launched on 28 October 2016, a meaningful track record has yet to be established, so the investment results shown here are for the Capital Group New World Composite (defined as a single group of discretionary portfolios that collectively represent a particular investment strategy or objective). This is intended to illustrate our experience and capability in managing this strategy over the long term. Our Luxembourg fund has been a member of this composite since the beginning of November 2016.

* Data as at 31 December 2016. Returns for Capital Group New World Composite (7.6% p.a.) vs. MSCI Emerging Markets Index (7.0% p.a.) and MSCI All Country World Index (4.1% p.a.) over the strategy’s lifetime (30 June 1999 to 31 December 2016) in US dollar terms. New World: The results shown for the Capital Group New World Composite are asset-weighted and based on initial weights and monthly results. For illustrative purposes the figures used are net of management fees and expenses from a representative Luxembourg fund share class (Z), calculated with a Total Expense Ratio (TER) of 102.5bps. MSCI EM: With net dividends reinvested. Prior to 31 December 2000, MSCI Emerging Markets Index with gross dividends reinvested. MSCI ACWI: With net dividends reinvested. Prior to 31 December 2000, MSCI All Country World Index with gross dividends reinvested. Sources: Capital Group, MSCI

This information supplements or enhances required or recommended disclosure and presentation provisions of the GIPS® standards, which if not included herein, are available upon request. GIPS is a trademark owned by CFA Institute.

Capital Group Emerging Markets Debt Fund (LUX)

A proven approach to managing an evolving asset class

Capital Group’s Emerging Markets Debt (EMD) strategy has the flexibility to invest across the broad EMD universe, so has the potential to capture the full range of opportunities and can help to mitigate the risks inherent in this asset class.

Bond opportunities in Argentina, India offer sharp contrast

Capital Group portfolio manager Rob Neithart discusses the contrasting bond opportunities he is finding in Argentina and India.