Capturing Asia’s secular growth opportunities

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This is a sponsored article from Capital Group.

 

 

Asia’s emergence as the world’s key engine of growth has been one of the most compelling investment stories in recent times. The latest addition to Capital Group’s growing list of investment offerings – Capital Group Asian Horizon Fund (LUX) – is designed to tap into this attractive opportunity set by relying on our deep investing history in the region to identify the champions of tomorrow.

The rise of global champions

There are many reasons why Asia has generated so much fanfare in recent years. Looking at projections by the International Monetary Fund, Asia is expected to account for close to 40% of global GDP within the next five years. That is a startling figure, especially when we consider that it only accounted for a little more than 15% of global GDP in 20001.

The impressive growth in top-line GDP figures is also accompanied by a seismic shift in the companies operating across the region. Asian companies have come a long way from being mostly imitators of their western counterparts in the 2000s to becoming world-leading companies in various emerging industries, such as fintech, health care research and development, the Internet of Things and precision technology.

Investors globally are increasingly interested in the emergence of local technology champions and the rise of consumers in Asia. The recently launched Capital Group Asian Horizon Fund (LUX)2 is therefore a great opportunity for us to meet the growing investor appetite for Asia-related investment products. Through a focused portfolio of around 60 stocks, the fund invests across the market cap and valuation spectrum, with the aim of achieving long-term growth of capital.

But unlike many Asian-focused funds that invest only in companies domiciled in the region, Capital Group Asian Horizon Fund (LUX) has the flexibility to invest in select global companies with significant growth in Asia ex-Japan. By combining local and global investments into one portfolio, this holistic approach can help the fund to capture important secular growth trends that are under-represented in the Asia ex-Japan universe.

Long history of investing in Asia

The relationship between Capital Group and Asia dates back more than three decades, when we invested in the region for the first time in 1986. Through decades of experience managing global, international and emerging market strategies, we have gained deep knowledge in the Asia ex-Japan region. Capital Group Asian Horizon Fund (LUX) is the culmination of our experience as we look to capture the most promising investment opportunities in one of the most dynamic and fastest-growing regions of the world.

Our long-term investment horizon is also a key differentiating factor, as it enables us to spot secular trends and adapt to shifts in business as well as consumer behaviour within the region. This is why Capital Group has such a strong track record of being early identifiers of some of Asia’s biggest names, having first invested in Samsung in 1992, TSMC in 1995 and Tencent in 2004.

The Asia of tomorrow

We will continue to pay close attention to the long-term secular trends that are emerging in Asia.

The key areas where we are finding interesting secular growth opportunities include the rise of China’s homegrown social networks, India’s increasing demand for digital financial services and how Southeast Asia’s growing millennial population is driving digital services across the region.

These long-term secular trends are fundamental to the exciting growth profile of the region and we are confident Asia will remain one of the most attractive investment opportunities in the world.

For more on Capital Group Asian Horizon Fund (LUX), visit our website or reach out to us here


Footnotes


1 As at October 2020. Forecast from 2020 onwards. Source: International Monetary Fund
2 Fund launch date: 24 March 2021. Source: Capital Group
3 As at July 2020. Source: Statista
4 Source : International Monetary Fund
5 Source : International Telecommunications Union (ITU)

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This is a sponsored article from Capital Group.

 

 

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