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Capital Group brings New Economy fund to Asia

The US asset manager teams up with DBS to distribute its Ucits product in Singapore.

The Luxembourg-domiciled Ucits fund is managed by the same investment team as the Capital Group New Economy fund in the US. The $22.7bn fund, launched in 1983, is a growth-oriented, global equity strategy that that invests in companies that can benefit from innovation, exploit new technologies or provide products and services that meet the demands of an evolving global economy, according to press statement.

The fund has four portfolio managers with an average investment experience of 30 years, and the lead principal investment officer is Los Angeles-based Tim Amour.

The strategy is predicated on a belief that there is a shift from a manufacturing-dominated economy to one based on services and information companies. It aims to identify and invest in companies at the forefront of data, scientific and technological advancements that can innovate and thrive in this ‘new economy’.

“It is for investors looking for capital appreciation through investing in companies of the ‘new economy’, with long-term growth potential,” said Andy Budden, investment director at Capital Group, in the statement.

Two-thirds of the fund is invested in North America, with sector overweights relative to the MSCI All Country World Index in information technology, communication services and healthcare, according to the fund factsheet. Top holdings include Netflix, Microsoft, Broadcom, Facebook and Amazon.

Technology-themed funds dominated the ranks of best performing products during the past decade, while ‘old economy’ funds, such as conventional energy and mining, were among the worst laggards.

The Ucits version of the Capital Group New Economy Fund was launched in both Hong Kong and Singapore last November, and has AUM of $53m.

“When promoting the product to our distributors, we opted for a launch announcement that would best coincide with the interest of our clients,” a spokeswoman told FSA.

Several firms were keen to advertsie their new economy credentials in Asia last year. They included Pictet, which promoted three multi-billion dollar security, digital and robotic funds, Value Partners, which launched a technology-focused multi-asset product, UOB Asset Management’s  sale of a “Global Innovation Fund” in Singapore and  Nikko Asset Management, which prepared a “Disruptive Innovation Fund”.

Capital Group hopes that having DBS as a distributor for its New Economy Ucits will help promote the fund in Singapore, and the firm is also looking at other ways to market the product.

“We are actively discussing the placement of this fund on our distribution partners’ platforms,” said the spokeswoman.

Capital Group, which has $2.1trn AUM according to its website, has 25 Luxembourg-domiciled Ucits funds available for Asian investors. The New Economy Fund is the seventh of its American funds strategy to be made available in Asia via the Ucits structure.

Capital Group New Economy Fund

Separately, JP Morgan has gained authorisation from Hong Kong’s Securities and Futures Commission (SFC) to launch a new China Bond Opportunities Fund, according to the regulator’s website.

A spokeswoman confirmed that the fund has received SFC authorisation, but would not comment further.

Part of the Mark Allen Group.