Description
A core belief in independent research, a long-term focus and diverse viewpoints through The Capital SystemSM define our investment process. As active managers, we believe that a comprehensive knowledge of companies and the global context in which they operate is the key to striving for superior long-term returns.
Objective
Long-term growth of capital and income
by investing in companies throughout the
developed markets, excluding the U.S.
Strategy Characteristics
Strategy inception date 1978
Assets in strategy (billions) $11.8
Benchmark
MSCI EAFE Index
Invests in
International equities
Minimum account size (millions)
Collective investment trust $5
Separate account $50
Assets in strategy as of September 30, 2014.
For a DC collective investment trust, plan size of $250
million may be used to satisfy the minimum account
size requirement.
Portfolio Management Team
Years of experience as investment professional with
Strategy | Capital | Industry
Michael Cohen 2 15 24
Gerald Du Manoir 5 24 25
David Fisher 25 45 49
Nancy Kyle 23 24 41
Lionel Sauvage 18 27 27
Rudolf Staehelin 19 33 35
Philip Winston 5 18 30
Years of investment experience and years with Capital
Group as of December 31, 2014.
Investment Process
A core belief in independent research, a long-term focus and diverse viewpoints
through The Capital System
SM
defne our investment process. As active managers,
we believe that a comprehensive knowledge of companies and the global context in
which they operate is the key to striving for superior long-term returns.
The investment process begins with in-depth research conducted by a large global
team of analysts through on-site visits to companies, their competitors, suppliers
and other relevant parties. Many of our analysts have made research their careers,
developing long-standing relationships with key people in the industries they follow.
International Equity portfolio analysts and managers also work closely with our
fxed-income and macroeconomic analysts when examining potential investments,
especially in global industries such as energy and technology, benefting from the
vigorous discussion of multiple views. Analysts as a group are given a portion of
portfolio assets to manage, each in their particular felds of expertise. Because they
manage money, analysts provide portfolio managers with clear signals about their
strongest convictions.
The investment team consists of seven portfolio managers, each of whom makes
independent investment decisions. Managers maintain a long-term view as they look
for quality companies at attractive prices. Varying investment styles and approaches
among managers result in robust interaction, with constant challenges to prevailing
convictions and frequent retesting of investment theses in each stock and market.
This entire process is overseen by a mandate manager who seeks to achieve an ideal
balance of convictions and investment styles to create a portfolio that refects the best
ideas of our managers.
We have a comprehensive framework for addressing risk. Our research process
and The Capital System help diversify the portfolio. Capital’s independent global
investment control group monitors compliance with portfolio guidelines. Our legal and
compliance team helps make certain we adhere to regulations in the markets in which
we invest.
Outlook and Strategy
Despite short-term worries about the pace of global economic growth, the portfolio
remains positioned for company-specifc opportunities in key industries, including the
information technology and consumer discretionary sectors. Innovative technology
companies, in particular, command a large portion of the portfolio because of their
high growth trajectory and the increasing use of technology products by consumers in
developed and emerging markets. Managers also favor certain consumer discretionary
companies as living standards around the world continue to rise and people spend
more on travel, clothing, luxury goods, automobiles and other discretionary items. The
portfolio remains less exposed to fnancials because of concerns about an increasingly
restrictive regulatory environment.
The U.S. economy appears to be fring on all cylinders, or close to it, with strong third-
quarter GDP growth confrming managers’ expectations for accelerating business
activity. That should help boost global growth in the near term as other economies
strive to catch up. The picture is not as bright in the euro-zone, which continues to
struggle with defationary pressures. China’s economy has slowed signifcantly and
Japan has returned to a recessionary environment. The divergence in economic
performance is likely to continue well into 2015 as the U.S. recovery powers ahead
and other nations seek to revive growth through massive monetary and economic
stimulus measures.
International Equity at Capital Group
Capital began managing domestic equity
portfolios for institutional clients in 1968
and has offered international equity
management since 1978. Capital’s frst
emerging markets equity fund was launched
in 1986, more than one year prior to the
inception of the MSCI Emerging Markets
Index. Our portfolios draw upon a deep pool
of research conducted by over 145 investment
professionals, many of whom are dedicated to
international and emerging markets equity (as
of September 30, 2014).
International Equity
Profle
December 31, 2014
Risk Characteristics (%) Standard deviation
(based on monthly returns) Composite Index Tracking error Information ratio
3 years 12.44 13.03 2.89 0.50
5 years 15.85 16.59 2.90 0.52
Sector exposure Portfolio Index
Energy 5.3 5.9
Materials 6.4 7.5
Industrials 12.0 12.6
Consumer discretionary 15.7 12.4
Consumer staples 7.1 11.1
Health care 8.2 10.9
Financials 20.5 26.0
Information technology 14.1 4.8
Telecom services 4.8 5.0
Utilities 1.3 3.8
Geographic exposure Portfolio Index
European Monetary Union 26.1 30.2
Other Europe ex. U.K. 15.7 14.6
United Kingdom 16.0 21.1
Middle East 0.0 0.6
Pacifc Basin ex. Japan 7.1 12.3
Japan 17.8 21.2
North America 5.3 0.0
Emerging markets 7.4 0.0
Top fve holdings Portfolio
Roche 3.2
ASML 2.8
AIA Group 2.4
Prudential 2.2
Keyence 2.1
Turnover (one year) 27.27
Portfolio Composition (%)
International Equity
Profle
December 31, 2014
All data as of December 31, 2014, unless otherwise specifed.
Returns are in USD. Periods greater than one year are annualized. Returns
refect the reinvestment of dividends, interest and other earnings.
Composite returns refect Capital Group International Equity Composite.
Composite returns are preliminary and net of withholding taxes on
dividends, interest and capital gains. Actual withholding tax rates vary
according to the country of denomination and tax status of each portfolio.
Composite net returns are calculated using the current highest
management fees. Actual investment returns net of management fees may
differ depending on, among other things, the applicable fee schedule and
portfolio size.
Composite returns prior to January 1, 1993 include the investment returns
of Capital Group Private Client Services accounts managed by institutional
portfolio managers with the same mandate.
The composite consists primarily of accounts that are allowed to invest a
portion of their assets in countries outside of the MSCI EAFE Index, such as
emerging market countries and Canada.
Composite risk characteristics are preliminary and gross of management
fees. The analysis is based on monthly data, and periods greater than one
year are annualized.
Portfolio refects Capital Group International Equity Trust (US) DB.
Index refects MSCI EAFE Index with net dividends reinvested.
Each index is unmanaged.
Totals may not reconcile due to rounding.
Capital Group manages equity assets through three investment groups.
These groups make investment and proxy voting decisions independently.
Fixed-income investment professionals provide fxed-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.
Any collective investment trusts (“CITs”) available under the strategy shown
are maintained by Capital Bank and Trust Company (“trustee”), which has
retained an affliate to serve as investment adviser to the trustee for
the CITs.
The statements expressed herein are informed opinions, are as of the date
noted, and are subject to change at any time based on market or other
conditions. They refect the view of an individual and may not refect the
view of Capital Group. This information is intended merely to highlight
issues and not to be comprehensive or to provide advice. Permission is
given for personal use only. Any reproduction, modifcation, distribution,
transmission or republication of the information, in part or in full,
is prohibited.
This information supplements or enhances required or recommended
disclosure and presentation provisions of the GIPS® standards, which if not
included herein, are available upon request. GIPS is a trademark owned by
CFA Institute.
Securities offered through American Funds Distributors, Inc.
This material is designed for use solely by Qualifed Purchasers,
institutional investors and consultants. It may not be disseminated
to or used by individual plan participants or retail investors.
Investment Results (%)
3 months YTD 1 year 3 years 5 years 10 years 15 years 20 years 25 years 30 years
Composite
– gross of management fees –1.66 –4.75 –4.75 12.50 6.84 5.52 2.87 7.79 7.68 11.46
– net of management fees –1.90 –5.70 –5.70 11.39 5.78 4.47 1.85 6.72 6.61 10.36
MSCI EAFE Index –3.57 –4.90 –4.90 11.06 5.33 4.43 2.54 5.02 4.31 9.04
© 2015 The Capital Group Companies, Inc.
doc_489031964.pdf
A core belief in independent research, a long-term focus and diverse viewpoints through The Capital SystemSM define our investment process. As active managers, we believe that a comprehensive knowledge of companies and the global context in which they operate is the key to striving for superior long-term returns.
Objective
Long-term growth of capital and income
by investing in companies throughout the
developed markets, excluding the U.S.
Strategy Characteristics
Strategy inception date 1978
Assets in strategy (billions) $11.8
Benchmark
MSCI EAFE Index
Invests in
International equities
Minimum account size (millions)
Collective investment trust $5
Separate account $50
Assets in strategy as of September 30, 2014.
For a DC collective investment trust, plan size of $250
million may be used to satisfy the minimum account
size requirement.
Portfolio Management Team
Years of experience as investment professional with
Strategy | Capital | Industry
Michael Cohen 2 15 24
Gerald Du Manoir 5 24 25
David Fisher 25 45 49
Nancy Kyle 23 24 41
Lionel Sauvage 18 27 27
Rudolf Staehelin 19 33 35
Philip Winston 5 18 30
Years of investment experience and years with Capital
Group as of December 31, 2014.
Investment Process
A core belief in independent research, a long-term focus and diverse viewpoints
through The Capital System
SM
defne our investment process. As active managers,
we believe that a comprehensive knowledge of companies and the global context in
which they operate is the key to striving for superior long-term returns.
The investment process begins with in-depth research conducted by a large global
team of analysts through on-site visits to companies, their competitors, suppliers
and other relevant parties. Many of our analysts have made research their careers,
developing long-standing relationships with key people in the industries they follow.
International Equity portfolio analysts and managers also work closely with our
fxed-income and macroeconomic analysts when examining potential investments,
especially in global industries such as energy and technology, benefting from the
vigorous discussion of multiple views. Analysts as a group are given a portion of
portfolio assets to manage, each in their particular felds of expertise. Because they
manage money, analysts provide portfolio managers with clear signals about their
strongest convictions.
The investment team consists of seven portfolio managers, each of whom makes
independent investment decisions. Managers maintain a long-term view as they look
for quality companies at attractive prices. Varying investment styles and approaches
among managers result in robust interaction, with constant challenges to prevailing
convictions and frequent retesting of investment theses in each stock and market.
This entire process is overseen by a mandate manager who seeks to achieve an ideal
balance of convictions and investment styles to create a portfolio that refects the best
ideas of our managers.
We have a comprehensive framework for addressing risk. Our research process
and The Capital System help diversify the portfolio. Capital’s independent global
investment control group monitors compliance with portfolio guidelines. Our legal and
compliance team helps make certain we adhere to regulations in the markets in which
we invest.
Outlook and Strategy
Despite short-term worries about the pace of global economic growth, the portfolio
remains positioned for company-specifc opportunities in key industries, including the
information technology and consumer discretionary sectors. Innovative technology
companies, in particular, command a large portion of the portfolio because of their
high growth trajectory and the increasing use of technology products by consumers in
developed and emerging markets. Managers also favor certain consumer discretionary
companies as living standards around the world continue to rise and people spend
more on travel, clothing, luxury goods, automobiles and other discretionary items. The
portfolio remains less exposed to fnancials because of concerns about an increasingly
restrictive regulatory environment.
The U.S. economy appears to be fring on all cylinders, or close to it, with strong third-
quarter GDP growth confrming managers’ expectations for accelerating business
activity. That should help boost global growth in the near term as other economies
strive to catch up. The picture is not as bright in the euro-zone, which continues to
struggle with defationary pressures. China’s economy has slowed signifcantly and
Japan has returned to a recessionary environment. The divergence in economic
performance is likely to continue well into 2015 as the U.S. recovery powers ahead
and other nations seek to revive growth through massive monetary and economic
stimulus measures.
International Equity at Capital Group
Capital began managing domestic equity
portfolios for institutional clients in 1968
and has offered international equity
management since 1978. Capital’s frst
emerging markets equity fund was launched
in 1986, more than one year prior to the
inception of the MSCI Emerging Markets
Index. Our portfolios draw upon a deep pool
of research conducted by over 145 investment
professionals, many of whom are dedicated to
international and emerging markets equity (as
of September 30, 2014).
International Equity
Profle
December 31, 2014
Risk Characteristics (%) Standard deviation
(based on monthly returns) Composite Index Tracking error Information ratio
3 years 12.44 13.03 2.89 0.50
5 years 15.85 16.59 2.90 0.52
Sector exposure Portfolio Index
Energy 5.3 5.9
Materials 6.4 7.5
Industrials 12.0 12.6
Consumer discretionary 15.7 12.4
Consumer staples 7.1 11.1
Health care 8.2 10.9
Financials 20.5 26.0
Information technology 14.1 4.8
Telecom services 4.8 5.0
Utilities 1.3 3.8
Geographic exposure Portfolio Index
European Monetary Union 26.1 30.2
Other Europe ex. U.K. 15.7 14.6
United Kingdom 16.0 21.1
Middle East 0.0 0.6
Pacifc Basin ex. Japan 7.1 12.3
Japan 17.8 21.2
North America 5.3 0.0
Emerging markets 7.4 0.0
Top fve holdings Portfolio
Roche 3.2
ASML 2.8
AIA Group 2.4
Prudential 2.2
Keyence 2.1
Turnover (one year) 27.27
Portfolio Composition (%)
International Equity
Profle
December 31, 2014
All data as of December 31, 2014, unless otherwise specifed.
Returns are in USD. Periods greater than one year are annualized. Returns
refect the reinvestment of dividends, interest and other earnings.
Composite returns refect Capital Group International Equity Composite.
Composite returns are preliminary and net of withholding taxes on
dividends, interest and capital gains. Actual withholding tax rates vary
according to the country of denomination and tax status of each portfolio.
Composite net returns are calculated using the current highest
management fees. Actual investment returns net of management fees may
differ depending on, among other things, the applicable fee schedule and
portfolio size.
Composite returns prior to January 1, 1993 include the investment returns
of Capital Group Private Client Services accounts managed by institutional
portfolio managers with the same mandate.
The composite consists primarily of accounts that are allowed to invest a
portion of their assets in countries outside of the MSCI EAFE Index, such as
emerging market countries and Canada.
Composite risk characteristics are preliminary and gross of management
fees. The analysis is based on monthly data, and periods greater than one
year are annualized.
Portfolio refects Capital Group International Equity Trust (US) DB.
Index refects MSCI EAFE Index with net dividends reinvested.
Each index is unmanaged.
Totals may not reconcile due to rounding.
Capital Group manages equity assets through three investment groups.
These groups make investment and proxy voting decisions independently.
Fixed-income investment professionals provide fxed-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.
Any collective investment trusts (“CITs”) available under the strategy shown
are maintained by Capital Bank and Trust Company (“trustee”), which has
retained an affliate to serve as investment adviser to the trustee for
the CITs.
The statements expressed herein are informed opinions, are as of the date
noted, and are subject to change at any time based on market or other
conditions. They refect the view of an individual and may not refect the
view of Capital Group. This information is intended merely to highlight
issues and not to be comprehensive or to provide advice. Permission is
given for personal use only. Any reproduction, modifcation, distribution,
transmission or republication of the information, in part or in full,
is prohibited.
This information supplements or enhances required or recommended
disclosure and presentation provisions of the GIPS® standards, which if not
included herein, are available upon request. GIPS is a trademark owned by
CFA Institute.
Securities offered through American Funds Distributors, Inc.
This material is designed for use solely by Qualifed Purchasers,
institutional investors and consultants. It may not be disseminated
to or used by individual plan participants or retail investors.
Investment Results (%)
3 months YTD 1 year 3 years 5 years 10 years 15 years 20 years 25 years 30 years
Composite
– gross of management fees –1.66 –4.75 –4.75 12.50 6.84 5.52 2.87 7.79 7.68 11.46
– net of management fees –1.90 –5.70 –5.70 11.39 5.78 4.47 1.85 6.72 6.61 10.36
MSCI EAFE Index –3.57 –4.90 –4.90 11.06 5.33 4.43 2.54 5.02 4.31 9.04
© 2015 The Capital Group Companies, Inc.
doc_489031964.pdf