At a glance
- The Capital Group New Perspective Fund will launch on 30 October 2015. Instructions to invest at launch need to be received by 5pm on Monday 26 October.
- The fund is launching with a fixed $10 price per unit. This will be converted into a price in sterling when the fund launches, but the equivalent sterling price will not be known in advance of launch.
- The fund is a mirror of a strategy Capital Group have run in the US for over 40 years. The managers aim to produce long-term capital growth by investing in blue-chip multi-national companies, which they feel are well positioned to take advantage of global trends or changing patterns of world trade.
- Capital Group was founded in Los Angeles in 1931. The company has grown considerably and now manage $1.4 trillion for their investors.
How do they manage money?
Robert Lovelace is lead manager of the fund and has been at Capital for 29 years. He is one of 7 portfolio managers, with an average tenure of 9 years, who are each responsible for between 7-13% of the total portfolio. Splitting the portfolio in this way enables each manager to take a high-conviction approach, holding 25-60 stocks, while the fund as a whole is diversified at around 225 stocks.
The portfolio managers are supported by a team of analysts who are based all over the world and research companies within their individual areas of expertise. The analyst team invest in their highest-conviction ideas within a research portfolio which accounts for 20% of the fund.
As the majority of the investments made by the managers arise from analyst recommendations, there is a large amount of crossover between the research portfolio and the rest of the fund. Both the portfolio managers and the analysts are remunerated based on the success of their investment choices.
What sort of companies do they look for?
The managers seek multi-national blue-chip companies. They believe companies that have grown outside their country's borders tend to have a diversified source of income, innovative management, strong balance sheets and high barriers to entry. They also typically have experience of working in other economies and accounting climates.
To qualify for investment, at least 25% of a company’s revenue must be derived from areas outside of its home country. The firm must also benefit from a global secular trend such as increasing disposable income in emerging markets or technology.
The individual managers have their own styles and biases; however, healthcare companies are often global businesses which makes them obvious candidates for the fund. Industrial and discretionary consumer companies are also likely to feature heavily. Conversely, retail, banking, insurance or utility companies tend to be domestically-focused so options here are often more limited. They also tend to be positioned away from material and energy companies. The fund has the flexibility to invest in emerging markets and derivatives which adds risk if used.
The fund will generally struggle in environments where one central theme dominates. For example, the US version of this fund lagged the market between 1984-1988 when Japanese equities performed strongly relative to the rest of the world. More recently, the fund underperformed in 2011 when the world was preoccupied by the European economy.
However, when investors are focused on the prospects of individual companies rather than trading on sentiment, the fund has tended to outperform the MSCI World Index in periods of both rising and falling markets. Although past performance should not be seen as a guide to future returns.
|Annual percentage growth|
| Oct 10 -
| Oct 11 -
| Oct 12 -
| Oct 13 -
| Oct 14 -
|Capital Group New Perspective||-4.06%||22.51%||23.10%||10.26%||9.12%|
|MSCI AC World||-6.59%||20.48%||18.15%||9.94%||1.86%|
Past performance is not a guide to future returns. Source: Lipper IM* to 01/10/2015.
Our view on this fund
The Capital Group New Perspective Fund is a unique proposition managed in a very different way to most global equity funds. There are a lot of people involved with running the fund and while they have clearly demonstrated strong performance in the past, we would prefer to meet more of the team before considering the fund for the Wealth 150 list of our favourite funds across the major sectors. We currently have greater conviction in the funds which already feature on the list.