230. Profits today rather than speculative growth tomorrow

Steven Smith, Investment Director for the Elite Rated Capital Group New Perspective fund, talks to us about how the fund’s original investment ethos - determined nearly 50 years ago - has evolved, and continues to evolve to today’s markets. He discusses how globalisation has changed their investment perspective, how growth stocks are being evaluated on slightly tweaked criteria to match the expectations of a recessionary market, and how a greater breadth of equity market leadership is good for active stock pickers.He also tells us about the benefits of having the fund’s investment analysts actively managing part of the portfolio, about how the long-term experience of the portfolio managers stands them in good stead for a wide range of varying investment cycles and markets, and concludes with a detailed analysis of 5 key factors that are driving the fund’s positioning today.
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This is the flagship global equities strategy of Capital Group. It has a track record of almost 50 years, investing in some of the world’s largest multinational firms that are able to benefit from transformational changes in the global economy. The fund has a unique multiple manager structure, with each of the nine named managers running their ‘sleeve’ in their own way. Their best ideas are blended together for a diversified portfolio.

What’s covered in this episode:

  • Is globalisation dead?
  • The evolution of the term ‘trade’, from physically traded goods to intangible data flows
  • How the fund is reacting to a less binary investment environment
  • Repositioning the fund to capture the next cycle
  • Growth stocks – and volatility – in a new investment environment
  • How the fund’s 50-year track record stands it in good stead for the next 50
  • How having investment analysts brings a greater depth of experience to stock-picking
  • Watching for a deeper recession, driven by earnings decline in the US
  • Outlook for 2023
This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.

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