With heightened market volatility and increasing uncertainty over inflation, it’s becoming increasingly challenging for investors to capture sustainable growth and income in a resilient way. It’s time to rethink and rebuild your portfolio.
Three key challenges for investors
Heightened market volatility
The risk of elevated inflation
Growth and income goals look difficult to achieve
Christophe Braun
Investment Director
In the following videos, Christophe Braun discusses why investors might want to consider rethinking their portfolio with Capital Group Capital Income Builder (LUX).
Christophe Braun is an investment director at Capital Group. He has 13 years of investment industry experience and has been with Capital Group for seven years. Christophe is based in Luxembourg.
It’s time to rethink your portfolio
Strategy 1: Pursuing quality investment opportunities, globally
Strategy 2: Exposure to potential inflation beneficiaries
Strategy 3: Seeking income growth potential
Three key reasons to consider Capital Group Capital Income Builder (LUX)
Seeks to capture capital appreciation through global dividend-paying companies
Invests in securities that could provide resilient returns in a higher inflationary environment
Captures opportunities with sustainable income and income growth potential
Capital Group Capital Income Builder (LUX)
Why Capital Group?
The world’s largest active mutual fund asset manager1
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Risk factors you should consider before investing:
- This material is not intended to provide investment advice or be considered a personal recommendation.
- The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment.
- Past results are not a guarantee of future results.
- If the currency in which you invest strengthens against the currency in which the underlying investments of the fund are made, the value of your investment will decrease. Currency hedging seeks to limit this, but there is no guarantee that hedging will be totally successful.
- Some portfolios may invest in financial derivative instruments for investment purposes, hedging and/or efficient portfolio management.
- There are additional ABS/MBS, Bonds, Counterparty, Derivative instruments, Equities, Liquidity and Operational risks associated with this fund.
Fund risks
ABS/MBS risk: The fund may invest in mortgage- or asset-backed securities. The underlying borrowers of these securities may not be able to pay back the full amount that they owe, which may result in losses to the fund.
Bonds risk: The value of bonds can change as a result of interest rate changes – typically when interest rates rise, bond values fall. Funds investing in bonds are exposed to credit risk. A decline in the financial health of an issuer could cause the value of its bonds to fall or become worthless.
Counterparty risk: Other financial institutions provide services to the fund such as safekeeping of assets, or may serve as a counterparty to financial contracts such as derivatives. There is a risk the counterparty will not meet their obligations.
Derivative instruments risk: Derivatives are financial instruments deriving their value from an underlying asset and may be used to hedge existing exposures or to gain economic exposure. A derivative instrument may not perform as expected, may create losses greater than the cost of the derivative and may result in losses to the fund.
Equities risk: The prices of equity securities may decline in response to certain events, including those directly involving the companies whose securities are owned by the fund, overall market changes, local, regional or global political, social or economic instability and currency fluctuations.
Liquidity risk: In stressed market conditions, certain securities held by the fund may not be able to be sold at full value, or at all. This could cause the fund to defer or suspend redemptions of its shares, meaning investors may not have immediate access to their investment.
Operational risk: The risk of potential loss resulting from inadequate or failed internal processes, people and systems or from external events.
All data as at 31 December 2023 in US$ terms and attributable to Capital Group, unless otherwise stated.
Glossary
Bond – A debt instrument, essentially a loan, issued by governments (a sovereign bond) or corporates (a corporate bond) and financed by investors. The bond holders receive interest payments, known as a coupon, and the principal of the bond when it is due.
Dividend – A sum of money paid regularly by a company to its shareholders out of its profits (or reserves).
Dividend yield – Dividend yield represents the ratio of dividends paid over the last 12 months to the net asset value as of the last month end. However, an annualised dividend yield is calculated on the basis of the most recent dividend payment when, in the last 12 months,
1. a share class has been launched for the first time; or
2. a share class changed its dividend payment frequency
- the dividend payment frequency was modified as a result of a corporate event (for instance a special dividend distribution or a closure and relaunch of the share class).
Downside resilience – An investment position that seeks to reduce the frequency and/or magnitude of capital losses resulting from the decline of a stock or a fall in the overall market.
Equity – Shares of ownership in a company.
Exposure – In investment terms, exposure refers to the amount of capital invested in a particular asset, industry or sector within a portfolio, and is usually expressed as a percentage.
Fixed income securities – A debt instrument issued by a government, corporate or other entity.
Investment-grade bonds – Assets rated BBB- or higher by rating agencies Moody’s, Standard & Poor’s or Fitch.
Treasuries – A marketable government debt security with a fixed interest rate and a maturity between one and 30 years.
Volatility – A statistical measure of the pace, frequency and magnitude of a security’s price movement over a period of time, expressed in standard deviation.