Market Volatility
Investment insights from Capital Group
At Capital Group, using third-party data is only a part of how we monitor current and potential investments. Corporate holdings* are reviewed against available third-party ESG data to identify potential ESG risks. We then draw on our investment professionals' deep knowledge and understanding of the issuer to determine the materiality of the risk to the investment case.
KEY TAKEAWAYS
Source: Capital Group
Note: A separate process is employed for the monitoring of sovereigns.
Source: Capital Group, MSCI, Sustainalytics. Latest as of July 2023.
A view of an example equity portfolio
As at 30 June 2023,ǁ approximately 3% of holdings in the example equity portfolio were flagged in the ESG monitoring process. These holdings are monitored by analysts and subject to a heightened level of research and potential engagement.
* Certain holdings are currently not covered by third-party monitoring providers.
‡ Corporate holdings are monitored to the extent they are covered by third-party data providers.
§ Florian Berg and others, Aggregate Confusion: The Divergence of ESG Ratings, Review of Finance, Volume 26, Issue 6, November 2022, Pages 1315–1344, https://doi.org/10.1093/rof/rfac033
ǁ Data as of 30 June 2023. UNGC is United Nations Global Compact. Donut chart: Reflects all of the portfolio’s holdings at the issuer level. The monitoring process covers 100.0% of the portfolio’s holdings, which represent 100.0% of the portfolio’s assets, excluding cash and cash equivalents. “Other” holdings are those that either do not have available third-party data or that are not currently covered in the monitoring process. The data used in the monitoring process currently applies only to equity securities and corporate and sovereign bonds. The percentage figures may not total 100 due to rounding. Largest flagged holdings table: Represents the largest flagged holdings in the portfolio (at the issuer level), indicated by asset weight based on the total assets of the portfolio, including cash and cash equivalents. Totals may not reconcile due to rounding.
Market Volatility
Global Equities
Long-Term Investing
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Past results are not a guarantee of future results. 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. This information is not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities.
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. All information is as at the date indicated unless otherwise stated. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.
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 organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.