Capital Ideas

Investment insights from Capital Group

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Active Management
Our strengths define the investment strategies we manage
KEY TAKEAWAYS
  • Our focussed range of investment strategies are defined by our strengths as an investment manager and the belief in our ability to help fulfil the long-term needs of our clients.
  • All our capabilities start with deep research into companies which allows us to make selective investment decisions and build our strategies from the bottom up with only our highest conviction ideas.
  • Our collegiate and collaborative culture, paired with our global locations and connectivity, generate investment insights and perspectives that set us apart.
  • All new strategies we launch must have an enduring thesis, fulfil a core client need, fit to our strengths as an active investor, and ultimately enhance our insights and capabilities in the strategies we already manage on behalf of existing clients.

Capital Group – a truly investment-led firm


Founded in the US in 1931, Capital Group is one of the world’s largest independent investment managers, with US$2.0 trillion of assets under management. Investment management is our only business. For more than 80 years, our aim has always been to deliver superior, consistent results for long-term investors. 


To this day, we remain what we have always been: an active, long-only manager. We are also a firm that remains truly investment led – even today six of the 11 members of the management committee of the firm, including the executive chairman and vice chairman, are first and foremost portfolio managers1


This has helped us stay true to things we believe we can do well, with a relatively compact range of investment services and a carefully considered approach to launching new offerings. 


Our tests for new offerings are that they should have a clear objective, meet a clear need, and represent durable ideas that we expect to be relevant for all time. Also, more unusually, new offerings must be additive to the investment process. That means new investment offerings should make us better at what we already do. While many strategies may meet the first set of criteria, it is the final test that we consider to be key. We do not bring in new teams of investment professionals to launch a new capability in an area where we do not have an existing offering, even if we believe it may meet a clear need and be a durable idea. Rather, any new strategies are staffed by existing investment professionals with the idea that they will benefit our other strategies. 


For example, when we launched our Emerging Markets Total Opportunities (ETOP) strategy, we selected a team that had the knowledge and passion to invest across all emerging market asset classes. We believe that launching a strategy where portfolio managers have the flexibility to invest in both emerging market debt and equity makes us better investors in emerging markets. This not only benefits ETOP, but all our emerging market strategies. 


That is what investment-led looks like in practice. 


An investment process with a global, long-term focus


Our investment philosophy is based on doing what we believe is right for investors. To help protect the value of investments, we pay close attention to risk. We base our decisions on a long-term perspective because we believe it is the best way to achieve solid long-term investment results.


Capital’s investment research efforts are organised on a global basis, with analysts and portfolio managers based around the world. Our investment professionals focus on finding great companies globally, not just the nearest. Their investment responsibilities often extend well beyond their home regions, forcing them all to take multi-regional and global perspectives. We find that this can help us bring a new level of insight to what is really taking place. It is very different to the approach of many other managers, where research and analysis are often regionally based, focused solely on the geography in which the analysts live. As a result, investment decisions relating to a US-based company, for example, may be founded or influenced based on ideas that are generated in a completely different part of the world.


1. As at 30 June 2020. Source: Capital Group


 


Risk factors you should consider before investing:

  • This material is not intended to provide investment advice or be considered a personal recommendation.
  • The value of investments 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.
  • Depending on the strategy, risks may be associated with investing in fixed income, derivatives, emerging markets and/or high-yield securities; emerging markets are volatile and may suffer from liquidity problems.


 

Past results are not a guarantee of future results. The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment. This information is not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities.

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. All information is as at the date indicated unless otherwise stated. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.