Quarterly macro and market insights: Optimism on the US economic outlook increased as the COVID-19 vaccination rollout accelerated, and the new Biden administration embarked on expansive fiscal policy. The US$1.9 trillion American Rescue Plan Act was signed into law in
Amid a US economic boom, how high can rates go? The possibility of an economic boom this year has stoked worries about higher inflation and prompted a sharp selloff in US Treasuries. We spoke with fixed income portfolio manager Pramod
Disappointing US dollar bond returns in EM local currency debt has led to a decline in flows into the asset class over the past decade. In this paper, we discuss the key reasons to invest in EM local currency debt, some of the factors behind the recent weakness in the asset class returns and prospects for the asset class going forward.
Since our founding in 1931, Capital Group has been owned primarily by the people who work here every day. Private ownership is a cornerstone of our ability to think long term when it comes to planning and investing. Among other things, it allows us to avoid the …
A distinctive approach to investing Capital Group has been investing around the globe for more than 60 years. Its unique multiple-portfolio manager approach, The Capital SystemSM, sets it apart from many other global asset managers. Rob Lovelace – who is
Rembrandt’s masterpiece “The Night Watch” is the inspiration for a multidisciplinary research process at Capital Group. Everyone in the painting is looking in a different direction and it is this gathering of multiple perspectives that summarises our approach to gaining a deeper understanding of market disruptions, assessing the risks and evaluating the opportunities that arise during times of extreme crisis.
Asia’s emergence as the world’s key engine of growth has been one of the most compelling investment stories in recent times. The newly launched Capital Group Asian Horizon Fund (LUX) (CGAH)1 is designed to tap into this attractive opportunity set and, in this Q&A, portfolio manager Christopher Thomsen explains why …
It has been more than a year since COVID-19 was declared a global pandemic. The start-stop lockdowns that followed the first wave of the coronavirus outbreak made it particularly tough for many businesses and individuals to adapt.
We share the views of some of our portfolio managers and economists on navigating the equity and fixed income markets in the year ahead and beyond. They also share how the last year has influenced long-term developments in economic and market outlooks.
The first 100 days in power for any new presidential administration is never easy. With US-China relations at arguably their lowest point in 50 years, the administration of US President Joe Biden will have to make some difficult policy decisions that could affect the balance of the world’s two largest economies. How could the relationship evolve over the next four years?
When Facebook paid $5.7 billion for a 10% stake in Jio Platforms, the digital technology arm of Indian conglomerate Reliance Industries, it signalled Silicon Valley’s growing enthusiasm for India’s consumer market. Facebook’s main interest in the deal with India’s largest mobile network was to process payments for millions of local retailers via its WhatsApp messaging service, which …
The market seems very positive on the global backdrop — do you agree with the consensus views? How will this impact emerging market debt?
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 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 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
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
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).
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 …
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 …
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
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 …
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 …
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 …
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 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 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 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
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
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
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
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
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
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
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
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
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
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.
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
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
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
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
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
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
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
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
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
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
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
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
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
