Capital Group's Polak: Q4 2018 Volatility Was 'just What The Doctor Ordered'

With over $1.6trn in assets under management, US-based Capital Group is one of the biggest investment managers in the world.

But despite being almost 100 years old, it has kept under many people's radars, particularly in the UK.

Founded in 1931, the firm has 40 strategies spanning equities, fixed income and multi-asset, all of which follow a multi-manager structure.

Some 23 are now available to European and Asian investors, having launched in SICAV format over the last five years and, last week, Capital Group announced plans to build its Luxembourg range further by launching at least one new fund every year over the next three years.

Often touted as its flagship product, the New Perspective fund was launched in the US in 1973 to offer a "smooth pattern of returns from a focus on multinational companies with diversified growth".

It was converted into a SICAV in October 2015 and since then, has returned 55% in line with its MSCI AC World benchmark return and ahead of the IA Global sector's average return of 43%, according to FE.

David Polak, who represents the group's global equity services and leads its equity investment specialist team, said response to the fund has been strong and assets under management surpassed $4bn at the start of 2019.

The fund has a unique approach in that 20% of the portfolio is run by a team of research analysts, while the remaining 80% is divided equally between seven different fund managers based in different areas across the world.

Holdings must derive at least 25% of their assets from outside their home market and have a weighting limit of 5% across the portfolio. There are also sector and regional limits to ensure the fund remains global in nature.

Polak said: "The limits are broad so there is a lot of wiggle room but we do not want somebody who thinks they have a global fund to wake up and realise it is actually a US fund."

Having launched over 45 years ago in the US, the fund has seen many cycles and has grown and developed alongside them.