Capital Group’s pioneering EM-focused strategy, New World, marks 20 years

Capital Group’s pioneering EM-focused strategy, New World, marks 20 years

Emerging Markets
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Capital Group, one of the world’s largest and most experienced investment firms, with over US$1.6 trillion in assets under management, marks 20 years of its emerging markets (EM) strategy, New World.

The New World strategy is managed through a domicile-agnostic approach. It invests in EM companies and developed market (DM) multinationals benefiting from the long-term growth potential of EM. This combination helps capture greater breadth and depth of EM growth opportunities, creates a more diversified strategy, and potentially leads to a less volatile, more resilient strategy in down markets.

The investment opportunity in EM is greater than the companies domiciled there: 50% of the MSCI World Index has a revenue exposure of 20% or more to EM.

Richard Carlyle, Investment Director, Capital Group, said: “We are a pioneer in EM investing and worked with the World Bank to launch the world’s first emerging market equity fund in 1986. Today we have a global perspective on EM investing. The New World strategy invests in domestic EM and global companies that are set to succeed in EM, regardless of their domicile, index or benchmark.

“Since its launch in 1999, the New World strategy has outpaced both emerging market and global equities, demonstrating that its unique combination of local and global companies could offer an attractive opportunity for investors looking for a more resilient way to capture the growth potential of emerging economies.

“Most companies around the world have some combination of customers, suppliers and production lines in multiple countries. Despite this, investors remain tied to asset allocation by where companies are headquartered rather than where they generate revenue. Investors should consider building portfolios based on their objectives rather than size, style and domicile.”

Capital Group created the first international indices (Capital International World) in 1965, which were the predecessors to the MSCI indices. The firm launched the world’s first emerging market equity fund in 1986, at the invitation of the World Bank. It has been investing in EM for more than 30 years and in that time Capital Group has built deep experience, investment insights and strategies in EM, and a global network of 60 EM analysts.