What will be the key factors driving EM debt markets in 2021?
The market seems very positive on the global backdrop — do you agree with the consensus views? How will this impact emerging market debt?
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Will the Fed’s new policy framework bring higher inflation?
In January, the US Federal Reserve affirmed its commitment to low interest rates for a prolonged period of time under its new monetary policy framework. If anything, with its renewed focus on “broad-based and inclusive” maximum employment and a goal of achieving inflation that averages 2% over time, the …
The world in 2030: Investing for the next decade
The world in 2030 may seem a long way off, but at Capital Group we spend a lot of time thinking about the distant future. “Imagining life in 2030 is not a hypothetical for me,” notes Capital Group vice chairman Rob Lovelace, a sentiment echoed by many of his colleagues. “In the portfolios that I manage, my average holding period is about eight years, so I’m living that approach to investing.”
Is Big Tech in big trouble?
Is Big Tech in big trouble? Is there such a thing as being too successful, too influential and just too big? We may find out in the months and years ahead as the world’s largest technology and consumer tech companies
Video: Capital Ideas Talks with Martyn Hole
Capital Ideas Talks with Martyn Hole Investment Director, Martyn Hole, shares his view on the outlook for equity markets. He explains why the backdrop is broadly supportive of equity valuations, considers the prospects for different sectors, examines how events of
Europe’s global leaders offer some attractive opportunities
With the pandemic-induced shutdown of 2020 — which caused the worst recession since the Great Depression — behind us, solid growth is expected across major economies in 2021, according to the International Monetary Fund (IMF).
What do the unprecedented monetary and fiscal measures mean for inflation?
As the largest vaccination programme in history commences, risk markets appear to be ignoring the logistical challenges or near-term downside growth risks from tighter lockdowns imposed after infection rates in Northern Hemisphere countries soared over the winter. With the S&P at or close to all-time highs and many …
5 reasons why EM equities could power ahead in 2021
Has the tide finally turned for emerging markets equities after a decade of trailing US markets? It’s a question we often hear. After two consecutive years of solid gains for the benchmark MSCI Emerging Markets Index, emerging markets appear well positioned for further growth. The US dollar has weakened, commodity prices have …
Quarterly macro and market insights
Amid rising optimism, preparing for setbacks as recovery unfolds is prudent. The rollout of vaccinations has bolstered optimism around the outlook for the global economy in 2021. Even so, the trajectory of the pandemic will continue to hold sway over near-term
Introducing the Capital Group European Opportunities strategy
Capital Group European Opportunities (LUX) will be available to investors in Asia and Europe with its launch as a Luxembourg-domiciled fund in February 2021. The fund will offer access to a longstanding European equity strategy, originally launched as a segregated account in 1992. The fund will be managed by …
Reset or Rebound?
To what extent is the world really changing and what are the long-term investment implications? Responding to the transformative events and trends of the COVID-19 crisis, we sought the views of three …
In the money: Financial exchanges hit the sweet spot
Financial sector headlines are often dominated by banks and insurers. But there is one area that has emerged as a steady grower and dividend payer: financial exchanges. Exchanges’ gains contrast against steep declines in the broader financials sector, where traditional banks in particular have grappled with ultra-low rates and a slowing global economy. Over the …
What lies ahead for the US economy?
It really is different this time. While this is not the first pandemic the US has faced, our reaction to it — the restrictions placed on portions of the US economy, and the policy response — are truly unprecedented. First, there are lots of reasons to be optimistic about the US economy over the longer term. Official productivity statistics likely understate the impact of innovation …
Municipal bond outlook: Silver lining to COVID storm clouds
Municipal bond outlook: Silver lining to COVID storm clouds Commuter trains with seats to spare at rush hour. Vacant dorm rooms. And, of course, hospital wards, stretched to capacity. The effects of COVID-19 on all our lives have been plain
As assets have grown, our size has not been a hindrance to our highest convictions
As assets have grown, our size has not been a hindrance to our highest convictions Asset growth and size – equity, January 2021 Size and scale afford Capital Group important advantages. Our global reach, reputation and financial strength help us
Long-term perspective on markets and economies
Long-term perspective on markets and economies 2021 Outlook: Turning points on the road to recovery. We may one day look back at 2021 as a major turning point for the global economy, public health, politics and how we live and
Update on global citizenship 2020
At the outset of 2020, none of us could have anticipated just how timely the topic of citizenship would be. We are now living in a world in which social distancing has become the norm as we try to halt
Emerging market debt outlook for 2021
Investment Insights 2020 was a volatile year for emerging markets (EM). EM debt faced underperformance during the first half of the year, a sharp retracement and outperformance relative to developed markets during the early summer, and subsequent bouts of intermittent
Global corporate bonds Q&A with Damir Bettini: a time for selectivity and stringent credit analysis
Investment Insights Key takeaways Global corporate bonds have recovered strongly since the peak of the sell-off experienced in March. With credit spreads having tightened considerably since then, I believe the rally was justified for technical reasons due to unprecedented levels
Emerging market investing: Allocation to the fastest-growing markets
Investment Insights While each crisis is different, what is striking about this global pandemic is that (excluding China) the impact on emerging market assets appears to be more dire than the spread of the virus itself to those countries. The
Elections and a vaccine: Implications for fixed income investors
Investment Insights The US election results and the announcement of a potential COVID-19 vaccine from Pfizer have been pivotal events in markets, initially providing a substantial boost to risk assets. Mixed economic data and a rapidly rising rate of coronavirus
Emerging markets: Into the new decade
Investment Insights Coronavirus-induced lockdowns have wreaked havoc on the global economy. Among emerging and developing countries, those that are heavily dependent on global trade, tourism, commodity exports, and external financing are likely to be the hardest hit, according to the
Emerging market equity investing and the role of geographical boundaries
Investment Insights As emerging markets continue their rise towards becoming one of the key drivers of global growth, improved capital and information flow have brought to the fore alternative ways of investing in the asset class. In this paper, we
Are disruptors the next generation of defensive stocks?
Investment Insights 2020 has seen significant headwinds. Sectors that have traditionally been viewed as defensive are no longer considered safe havens. Energy is one example. This high yielding sector has been among the hardest hit during the COVID-19 pandemic and
China’s biopharma industry moves closer to inflection point
Investment Insights In the global scramble to develop a COVID-19 vaccine, brand-name biopharmaceutical giants in the United States and Europe appear to have promising candidates. But there are also several lesser known companies playing a role in helping produce a
Emerging market debt in the new decade: an active approach
Investment Insights Emerging market debt (EMD) has already broadened and deepened significantly in the last few decades and as the asset class has developed, it has become more appealing to a broader investor base. Issuance has increased, thereby improving liquidity.
Is the dollar’s stumble a sign of things to come?
Investment Insights Is the U.S. dollar entering a new multiyear bear cycle, or is it just experiencing an episode of weakness in an already decade-long bull run? It’s a question at the top of investors’ minds given the dollar’s steady
5 years old, but wiser than its years
Capital Group New Perspective Fund (LUX) It’s been five years since Capital Group launched its New Perspective strategy in a Luxembourgdomiciled vehicle, giving investors in Europe and Asia access to a core global equity strategy with a successful 47-year track
Capital Group Global High Income Opportunities (LUX) (GHIO) Q&A with Rob Neithart
Q&A with Rob Neithart, Fixed Income Portfolio Manager Based in Los Angeles We have experienced an extraordinary year so far. How did GHIO navigate the volatility and what have you done in the portfolio since then? Going into the period of
Emerging market exchange rates: cheap or value traps?
Investment Insights Over the past decade, emerging market (EM) currencies have weakened significantly and local currency bond investors have seen little exchange rate returns. In fact, EM exchange rates (FX) have been a major source of volatility … Key Takeaways
ESG is integral to our long-term investing philosophy
Investment Insights Key takeaways Capital Group has always considered ESG factors in our research and analysis We have systematically integrated ESG factors through sector-specific research frameworks We believe a heightened focus on ESG will help us deliver better outcomes for
Japan has new leadership but it’s the same stock pickers’ market
Investment Insights Japan has a new leader: Yoshihide Suga, who replaced his ally Shinzo Abe, the longest-serving prime minister in the country’s history, in September. We asked Akira Horiguchi, co-principal investment officer on the Capital Group Japan Equity strategy what
Quarterly macro and market insights
From Capital Group’s fixed income team The global economy has stabilised sooner than had been anticipated. Unprecedented fiscal and monetary policy responses have helped, though pre-COVID economic levels may still not be recovered for another one to three years. The
US elections: an insider’s view
Investment Insights – US elections: an insider’s view To briefly re-cap how the US presidential election works: it is decided not by the popular vote but by the electoral college vote. The successful candidate in each state takes all the
Fed’s shift on inflation unlikely to send it higher soon
Key takeaways Fed shifts policy to accept inflation above 2% target “for some time” Historic shift is unlikely to generate higher US inflation in the near term Key US inflation drivers not pointing to higher prices, despite COVID-19 stimulus
US corporate bonds: resilience through adversity
Investment Insights The Capital Group US Corporate Bond strategy showed tremendous resilience through the worst of the volatility experienced towards the end of the 2020 first quarter. In this paper, we take a closer look at this strategy and how
Will Abenomics continue in a post-Abe Japan?
Abenomics at a glance Referring to the economic policies advocated by Prime Minister Shinzo Abe since his victory in the 2012 general election, Abenomics consists of three arrows: aggressive monetary policies, fiscal consolidation and a growth strategy. The key aim
Quality Growth: Resilient businesses in a low-rate world
Growth stocks have continued to outpace value stocks in the recent market volatility Quality Growth, a subset of the growth universe, has shown relative resilience in this selloff Experienced management teams, robust balance sheets, high return on capital and strong
US corporate debt: opportunity and risk in a post-COVID world
We believe central bank stimulus has reduced the probability of stronger investment-grade bonds being overwhelmed by further bouts of market volatility. Fresh US interest-rate cuts should also encourage European and Asian investors back to US corporate bonds, as hedging back
Guide to market recoveries – How to stay focused on long-term success
“During major market downturns, we need to focus on how much will be the same and what’s permanently changed. The analogy we use is to look across the valley and see the other side. It was a much different situation
The future of the travel & leisure sector: The analyst view
Key points: In the current environment, travel is negatively impacted as friction costs have increased, and the risk/reward balance has changed. This environment will not last forever. Attractive investment opportunities remain available in companies that can get through the current
Global investment grade corporate bonds: a sector for all seasons
Recent market volatility has once again refocused investors’ minds onto answering the question of the optimal route to constructing a well-diversified portfolio. The benefits of diversification are always sought, and the recent period has been a stark reminder of these
China: 3 views on what’s next for its economy and stocks
China’s economic rebound from COVID-19 will likely be gradual. We anticipate growth will pick up in 2021 as more fiscal stimulus is pumped into the economy. Stimulus policies are likely to shift in favor of technology-related infrastructure, rather than property
Japanese equities: What the future holds after the pandemic
Japan faces many headwinds as it battles COVID-19 alongside other challenges unique to itself. Bright spots can still be found, however, amid the economic storm. In this Q&A, the co-principal investment officers of the Capital Group Japan Equity strategy put
Emerging market debt: three months into the crisis
We still believe that there is good value across a range of emerging market (EM) debt assets – in absolute terms and relative to other fixed income asset classes Emerging market debt is unlikely to face a broad EM debt
Insights: Mid-year Outlook: Recovery on the horizon
Key takeaways Because this economic decline is policy driven, a solid recovery is likely as lockdowns end. Easy monetary policy, aggressive fiscal policy and zerobound interest rates should continue to support equity markets. Low growth and inflation suggest that the
Is the sun rising for Japanese equities?
COVID-19 and the consequent market volatility have had a huge impact on the Japanese economy. How will the situation affect the Japanese equity markets in the years ahead? Equity portfolio manager Dickon Corrado shares his views on why Japan is
Long-term perspective on markets and economies
2020 Midyear Outlook key takeaways: Macro:Recoveries have been longer and stronger than downturns. Equitie: Companies will drive the next recovery. Fixed income: Core strength is paying off.
How will emerging market debt emerge from the crisis?
Key takeaways The impact of the recent volatility has varied greatly within emerging markets, particularly between the investment grade and higher yielding parts of the asset class. This has been reflected in the differences in yields in local and hard
Where next for fixed income markets
Key points: Bond markets have stabilized, but the economic recovery will be measured in years. Central banks, as well as governments through fiscal stimulus measures, have played a key role in supporting markets. This is a time to be patient,
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