US investment giant targets Europe with equity fund

US investment giant targets Europe with equity fund

US giant Capital Group is to offer its equity growth strategy to European and Asian investors.  

From 16 June the Luxembourg-based UCITS fund will give investors the opportunity to invest in companies with proven track records and clear business models that will offer the potential for good future growth over the long term.

A variety of share classes are available for investments starting from $2,000 or equivalent, and with no maximum.

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Natasha Braginsky Mounier, investment director at Capital Group, said: “We believe that the strategy is an attractive long-term way to gain US equity exposure but is also well positioned in today’s environment.

"The US economy remains robust and although the market multiples are higher than historical averages, at an individual company level we are still finding many quality growth companies whose prospects for expansion and earnings growth more than justify their valuations.

“Many of these are global businesses, so they are generally benefiting from less upward pressure on the US dollar.”

Capital Group AMCAP (LUX) has been delivering attractive returns for 50 years. Its latest 12 month returns yielded 11.2 per cent against 9.9 per cent for the S&P 500, the index for large capital US equities.

Dennis Hall, chartered financial planner at Yellowtail, said: “The US version of this fund is not particularly expensive, though not as low cost as a tracker, whether the European version will be as cheap remains to be seen. Its benchmark is the S&P500, which it has outperformed over the long-term, though short-term performance isn’t as good.

“I question whether the S&P 500 is an accurate benchmark as the fund composition has a small weighting to small and medium sized companies, and a small overseas exposure. Could a similar tracker compositor have performed as well, or better?”