The UN SDGs were adopted by the United Nations in 2015 as a universal call to action by countries to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity. In total there are 17 UN SDGs covering social, economic and environmental issues. Taking an investor’s perspective, we have distilled the 17 UN SDGs into seven sustainable investment themes in managing the funds.
Consider the investment potential when sustainability meets opportunity
We believe that the opportunities created as we shift to a more sustainable world for future generations are broad and far-reaching. These transformational changes may generate substantial tailwinds for companies focused on solving for sustainability.
Watch the video on our sustainable investing approach
Some of the structural shifts driving the sustainable investing opportunity
The number of people over 60 will double by 2050
Source: World Health Organisation, as at October 2022
Nearly seven in ten people will live in cities by 2050
Source: World Bank, as at April 2023
More than 1.4 billion people globally remain unbanked
Source: World Bank, Global Findex Database, as at July 2022
Our sustainable investing approach
A global, multi-thematic approach
Offers access to rich and diverse investment opportunities and helps to capture the interconnected nature of sustainability.
A range of sustainable investment themes provides investors with the potential to achieve better risk-adjusted returns than single-themed sustainable strategies.
Combines aligned and transitioning companies
Any companies held in our Future Generations funds will need to demonstrate material or increasing alignment to at least one of the United Nations Sustainable Development Goals (“UN SDGs”).
This means our portfolios will include some companies that our analysts believe are transitioning to higher positive alignment with one or several UN SDGs.
Powered by proprietary bottom-up research
Our deep, fundamental research draws on our global team of more than 475 investment professionals.
Our rigorous proprietary eligibility process combines the best of our investment team and ESG specialists and is central to our sustainable investment offering.
A company is considered ‘aligned’ if 50% of its business supports one or more of the UN SDGs. We typically use revenue to assess business alignment, but will leverage other metrics if there are more sector-relevant financial metrics for a company and its industry (e.g., energy production mix for utilities).
Our investment team explains our unique approach to our Future Generations funds in this video
A multi-thematic approach with themes mapped to the UN SDGs
Our seven sustainable investment themes and examples of the investment opportunity
Our 7 themes can offer investors rich and diverse investment opportunities.
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Health & well-being
Pharmaceuticals; Biotechnology
Energy transition
Electric utilities with renewables generation; Electric vehicle (EV) auto and battery manufacturing
Sustainable cities & communities
Green building suppliers; Sustainable building products
Responsible consumption
Waste reduction, reuse and recycling; Chemical, waste and power management
Education & information access
Education providers; Internet, software and hardware providers expanding access to information
Financial inclusion
Banks and asset managers targeting under-served populations; Payment platforms
Clean water & sanitation
Water utilities; Chemical water treatment
See how our multi-thematic approach can offer compelling opportunities for investors
References to the UN SDGs do not imply the endorsement by the UN of Capital Group, its products or services, or of its planned activities.
Capital Group: A research powerhouse
Few firms can match the scale and scope of our proprietary research.
475+
Investment professionals across equity and fixed income – collaborating globally
45+
Dedicated ESG professionals
20+
Data scientists and developers building our proprietary ESG tools
20,000+
Company shareholder meetings in 2023
Our Future Generations funds
Seeking to capture the diversification benefits from a global multi-thematic approach to long-term investment opportunities, across equity, fixed income and multi-asset.
Capital Group Future Generations Global Opportunities Fund (LUX)
Global equities
Capital Group Future Generations Global Corporate Bond Fund (LUX)
Global corporate bonds
Capital Group Future Generations Global Balanced Fund (LUX)
Global 60:40 balanced portfolio
Investment insights from Capital Group
WHY CAPITAL GROUP
A product range backed by one of the world’s largest active investment managers
US$2.5T
in total assets managed
28 years
average investment industry experience of our equity and fixed income portfolio managers
90+ years
of active investing since 1931
As at 31 December 2023. Source: Capital Group. Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organisation; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups. The three equity investment groups and fixed income investment group conduct engagement activities independently as well. Where applicable, fixed income assets are managed by Capital Fixed Income Investors.
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All information as at 31 December 2023 and attributed to Capital Group, unless otherwise specified. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.
Any statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates.
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.
- There are additional risks associated with these funds. See fund risks for more information.
Fund risks
1. 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.
2. 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.
3. 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.
4. Emerging markets risk: Investments in emerging markets are generally more sensitive to risk events such as changes in the economic, political, fiscal and legal environment.
5. 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.
6. 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.
7. Operational risk: The risk of potential loss resulting from inadequate or failed internal processes, people and systems or from external events.
8. Sustainability risk: Environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment of the fund.
Fund |
Key risks |
|---|---|
| Capital Group Future Generations Global Opportunities Fund (LUX) | 2, 4, 5, 6, 7, 8 |
| Capital Group Future Generations Global Corporate Bond Fund (LUX) | 1, 2, 3, 4, 6, 7, 8 |
| Capital Group Future Generations Global Balanced Fund (LUX) | 1, 2, 3, 4, 5, 6, 7, 8 |