Partner Insight: Taking a new perspective on global investing

clock • 8 min read
Partner Insight: Taking a new perspective on global investing

Partner Content, Capital Group, sponsor of the Global Equities event, discusses the New Perspective strategy and portfolio for equity management.

Can you give a brief overview of your strategy in terms of what you are trying to achieve for investors, your investment process and the make-up of the investment team?

The New Perspective strategy, on which the Luxembourg fund is based1, is a core, flexible, global equity strategy that has stayed relevant for more than 50 years. It uses bottom-up research to identify companies that seek to drive and benefit from transformational change arising from changing global trade patterns and multi-generational secular shifts in the global economy. 

A particular feature of New Perspective is its focus on multinational companies. Multinationals represent a cohort of companies that are particularly good at responding to change. They are typically well-equipped to deal with uncertainty and disruption, have strong and experienced management teams, and are capable of navigating different environments. New Perspective invests across the spectrum, from early-stage to established multinationals. This allows the portfolio exposure to the potential global champions of today and tomorrow. 

A genuine, long-term investment horizon is an enduring focus of the New Perspective strategy. It is not positioned to time or capture ‘inflection points,' or market movements in the coming months and quarters. Instead, we invest in long-term leaders that are looking to drive, shape and benefit from transformational changes in the global economy. Looking beyond short-term noise, market volatility and maintaining a truly long-term perspective is critical at times when the outlook continues to be uncertain.

With a track record of more than 50 years, New Perspective has demonstrably navigated a variety of market environments and economic cycles.

How are you currently positioning your portfolio?

While the New Perspective portfolio is constructed from the bottom-up on a stock-by-stock basis, a top-down view shows exposure to several key, multi-decade trends: 

Continued digital disruption: The last decade of digital disruption was powered by cloud computing, SaaS (software-as-a-service) and internet platforms. We still expect strong growth in these areas over the next decade, but we believe the next lift could come from the mass adoption and commercialisation of artificial intelligence (AI). 

Health care innovation: We are in a golden era of health care innovation with companies developing new drugs and platform technologies to combat large and underserved markets such as obesity and cancer. New Perspective is invested across a broad range of companies, market caps and sub-sectors within health care, with a preference for companies with proven franchises, strong pipelines and/or no significant patent cliffs. 

Energy transition: The global decarbonisation effort is expected to provide multi-decade tailwinds for companies trying to enable, solve or support the energy transition. We are finding investment opportunities across industries including raw materials, electric vehicles (EVs), energy storage, electrification equipment, air conditioning providers and alternative fuels (e.g. hydrogen). 

Evolving globalisation: Elevated geopolitical tensions and supply chain disruptions have caused many to reconsider the notion of efficiency over resiliency. New Perspective seeks to benefit from changes in globalisation and ‘nearshoring' is providing interesting growth opportunities for companies in industries such as logistics, infrastructure machinery and medical equipment.

Can you identify a couple of key investment opportunities for your fund you are exploring at the moment in the portfolio? This could be at a stock, sector or thematic level.

The next major leap in the digital disruption era could potentially emerge from the mass adoption and commercialisation of AI. 

As investors, one of the most attractive features of AI is that its ultimate addressable market is potentially limitless given its pervasiveness across so many parts of the economy. However, it remains crucial to separate short-term hype from longer-term investment opportunity. 

We expect the AI opportunity set to evolve profoundly over the next decade, based on experience with previous paradigms. For example, in the early years of smartphones, few could have predicted that mobile applications such as Uber or Airbnb would emerge to become everyday services. With AI, our current imagination of what new applications may be possible is based on our limited understanding of this nascent technology. 

Of course, there are hundreds, if not thousands, of start-ups that are trying to build the next potentially game-changing product, but it's very difficult to accurately predict which of these could eventually succeed. Instead, our focus is on incumbent companies that are integrating AI features successfully into their existing suite of applications, as this is where we believe more value is likely to be captured in the near-term.

Find out more from Capital Group New Perspective Fund (LUX)

1. Capital Group New Perspective Fund (LUX) [inception October 2015] is part of the Capital Group New Perspective strategy, which was launched in March 1973. It is managed by the same experienced investment team.

All data as at 31 March 2024 and attributed to Capital Group unless stated otherwise. 

FOR PROFESSIONAL/QUALIFIED INVESTORS ONLY
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Fund risks
Capital Group New Perspective Fund (LUX)
Counterparty risk: Other financial institutions provide services to the fund such as safekeeping of assets, or may serve as a counterparty to financial contracts such as derivatives. There is a risk the counterparty will not meet their obligations.
Emerging markets risk: Investments in emerging markets are generally more sensitive to risk events such as changes in the economic, political, fiscal and legal environment.
Equities risk: The prices of equity securities may decline in response to certain events, including those directly involving the companies whose securities are owned by the fund, overall market changes, local, regional or global political, social or economic instability and currency fluctuations.
Liquidity risk: In stressed market conditions, certain securities held by the fund may not be able to be sold at full value, or at all. This could cause the fund to defer or suspend redemptions of its shares, meaning investors may not have immediate access to their investment.
Operational risk: The risk of potential loss resulting from inadequate or failed internal processes, people and systems or from external events.
Sustainability risk: Environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment of the fund.
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 guarantee of 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. Currency hedging seeks to limit this, but there is no guarantee that hedging will be totally successful.
• Some portfolios may invest in financial derivative instruments for investment purposes, hedging and/or efficient portfolio management.
• There are additional Counterparty, Emerging markets, Equities, Liquidity, Operational and Sustainability risks associated with this fund.
This communication is intended for the internal and confidential use of the recipient and not for onward transmission to any other third party. 
This communication is issued by Capital International Management Company Sàrl (CIMC), unless otherwise stated, which is regulated by the Luxembourg CSSF - Commission de Surveillance du Secteur Financier. CIMC manages the Luxembourg-based UCITS fund(s), organised as a SICAV, which is a (are) sub-fund(s) of Capital International Fund (CIF). 
This communication is of a general nature, and not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities. All information is as at the date indicated and attributed to Capital Group unless otherwise stated. While Capital Group uses reasonable efforts to obtain information from third-party sources that it believes to be accurate, this cannot be guaranteed.
The fund(s) is (are) offered only by Prospectus, together with any locally required offering documentation. In Europe, this is the PRIIPs Key Information Document (KID). In the UK, this is the UCITS Key Investor Information Document (KIID). These documents are available free of charge at capitalgroup.com/europe, and should be read carefully before investing.
Investors acquire shares of the fund, not the underlying assets.
The material is not intended to be distributed or used by persons in jurisdictions that prohibit its distribution. If you act as representative of a client it is your responsibility to ensure that the offering or sale of fund shares complies with relevant local laws and regulations.
The information in relation to the index is provided for context and illustration only. The fund is actively managed. It is not managed in reference to a benchmark.
For Italy: A full list of Paying Agents and Distributors is located on the website stated.
For Spain: A list of distributors is located at CNMV.es. CIF is registered with the Comisión Nacional del Mercado de Valores (‘CNMV') under the number 983.
For Switzerland: The Representative in Switzerland: Capital International Sàrl, 3 place des Bergues, 1201 Genève. Paying agent in Switzerland for CIF: JPMorgan (Suisse) SA, 8 rue de la Confédération, 1204 Genève.
For UK: Compensation will not be available under the UK Financial Services Compensation Scheme.
The list of countries where the Fund is registered for distribution can be obtained at all times from CIMC or online at http://www.capitalgroup.com
In Europe, facilities to investors (tasks according to Article 92 of the Directive 2019/1160, points b) to f)), are available at www.capitalgroup.com/individual-investors/lu/en/contact-us.html
For European investors, a summary of Fund Shareholder Rights is available at www.capitalgroup.com/eacg/entry-page/shared/summary-of-investor-rights.html
CIMC may decide to terminate its arrangements for marketing any or all of the sub-funds of Capital International Fund in any EEA country or in any other jurisdictions where such sub-fund(s) is/are registered for sale at any time, in which case it will do so in accordance with the relevant UCITS rules.
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