'My money is on Vertex Pharmaceutical, which has a solid pipeline'
"The other most significant positions in our portfolio are in Essilor, Netflix and Nestlé".
3' min read
Key points
3' min read
The dollar will remain the currency of choice, for some companies duties may be an opportunity, while among the sectors besides technology there is potential in healthcare and industrials. This is explained in detail by John Lamb investment director at Capital Group.
The American market has gone through all kinds of situations over the years. How has it changed?
Over the past ten years, US equities have performed exceptionally well, but this exceptionalism has been driven by a shrinking number of companies. Since we may be looking at a fundamentally different environment than in the last 10-15 years, it makes sense to maintain a balanced portfolio in terms of geography, sector and company.
New waves of tariffs are changing global trade patterns. Do they also bring opportunities?
Although great uncertainty still remains, many companies are already planning to reconfigure their global supply chains. This could result in direct benefits for some players. For example, suppliers of industrial equipment could benefit, as companies will build supply chains closer to their end markets. There are also second-order beneficiaries, i.e. companies that are in a relatively better position to deal with this environment. In this respect, we believe that multinationals are better positioned due to their flexibility, diversification, ability to be 'multi-local' and tendency to have experienced management teams.
Can protectionism also trigger a currency war? And will the dollar continue to be the currency of choice in this context?
It is possible, although there is great uncertainty about the extent of escalation or de-escalation of the current phase of trade tensions. It is difficult to imagine what other currency could replace the dollar as the world's reserve currency; dollar invoicing remains dominant in trade, dollar financing is essential for global banks and other corporations, and the dollar's role in daily currency markets is actually increasing. We have found that fundamentals matter much more than currencies when it comes to long-term returns for individual companies; therefore, we do not attach much importance to the currency in which a security is traded.
What does the New Perspective global strategy consist of?
When we launched the New Perspective strategy in 1973, we wanted to take advantage of 'changes in global trade patterns and economic and political relations'. This is an enduring philosophy because the world is constantly evolving and we are going through another period of significant change. Importantly, we have always pursued this by identifying the companies at the forefront of these changes, using extensive fundamental research. We focus on the factors that determine long-term earnings, beyond economic and market cycles,
