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Emerging Markets

INVESTMENT INSIGHTS  |  October 2016

The Long View: The Changing Face of the Global Consumer

Consumer spending, long a driver of the global economy, is undergoing sweeping change. Whether it’s housing for millennials or health care for baby boomers, a significant shift in the way people spend money is underway in both advanced economies and the developing world.

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MARKET COMMENTARY  |  October 2016

World Markets Review for October 2016

Global stocks declined modestly as signs of improvement in the U.S. economy raised investor concerns about higher interest rates. Health care stocks fell sharply amid ongoing drug pricing pressures and disappointing earnings reports, while the financial sector rallied on the outlook for rising rates. High-grade bonds lost ground and the U.S. dollar advanced against the euro, the yen and most other currencies.

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MARKET COMMENTARY  |  September 2016

World Markets Review for Third Quarter 2016

Stocks rebounded amid signs of stabilization in the global economy, strong earnings at bellwether companies and ongoing central bank stimulus measures. A “risk on” rally characterized the July-to-September period, following a highly volatile second quarter. Technology and materials stocks led markets higher, while the utilities and telecommunication services sectors declined. High-grade bonds advanced and the U.S. dollar fell against the euro and the yen.

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MARKET COMMENTARY  |  August 2016

World Markets Review for August 2016

Stocks finished the month essentially flat as signs of an improving global economy were offset by investor concerns about higher U.S. interest rates. Information technology and financial stocks enjoyed the biggest gains while the utilities and health care sectors lost ground. High-quality bonds also declined as the Federal Reserve hinted at a rate hike this year. The dollar rose modestly against the euro, the yen and most other currencies.

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MARKET COMMENTARY  |  August 2016

World Markets Review for July 2016

Global stocks rebounded from post-Brexit blues, regaining most of the losses suffered after British voters approved a referendum in June to leave the European Union. Central bank commitments to continue with easy monetary policy and economic stimulus measures helped to support stock prices. Emerging markets stocks rallied. Investment-grade bonds rose modestly. And the dollar was essentially flat against other major currencies.

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INVESTMENT INSIGHTS  |  July 2016

Are the American Funds Exposed to Brexit?

International Funds Have the Highest Concentration of Investments in European Companies.

The U.K.’s June 23 vote to leave the European Union surprised many investors, triggering one of the steepest two-day selloffs for global equities in history. While markets have since recovered much of those losses, volatility will likely persist as the short- and long-term impact of Brexit on the U.K. and the rest of Europe remains unclear. The uncertainty has driven government bond yields to record lows and the U.S. dollar to a three-decade high against the British pound.

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No doubt, the world’s markets spent the first half of 2016 on rocky ground. Investors have been confronted with the British vote to leave the European Union (“Brexit”), a “growth scare” in the U.S., the economic deceleration in China, and the introduction of negative interest rates in some markets. Nevertheless, the global economy is expected to remain on a path to growth — albeit very slow growth.

Looking ahead to the second half of 2016, market volatility is likely to remain elevated. What are the longer term implications of the Brexit vote? Can the resilient U.S. economy continue on its growth path? Will Chinese consumption remain healthy as the world’s second-largest economy continues to slow? Potential opportunity will likely arise for disciplined, active investors who can look past the near-term macroeconomic clouds toward individual companies with bright prospects.

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MARKET COMMENTARY  |  July 2016

World Markets Review for Second Quarter 2016

Global stocks rose modestly in a volatile quarter marked by heightened concerns about threats to worldwide economic growth. Stocks initially dropped sharply after British voters on June 23 approved a ballot measure to leave the European Union, but a strong bounce-back rally erased most of the losses. Rising oil prices fueled gains in the energy sector while consumer discretionary stocks declined. High-grade bonds, the U.S. dollar and gold rallied.

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MARKET COMMENTARY  |  June 2016

World Markets Review for May 2016

Stocks rose modestly as signs of improving global economic growth were tempered by investor concerns about a potential increase in U.S. interest rates. Developed markets generally outpaced emerging markets amid encouraging economic data in the U.S., Europe and Japan. Technology stocks rallied, while the energy and materials sectors lost ground. Bonds were essentially flat and the U.S. dollar rose against the euro, the yen and most other currencies.

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MARKET COMMENTARY  |  May 2016

World Markets Review for April 2016

Global stocks posted modest gains, supported by rising oil prices and aggressive monetary stimulus measures. Energy and materials stocks rallied as signs of improving demand from China sent commodity prices sharply higher. Information technology stocks declined on disappointing first-quarter earnings at some bellwether companies. Bonds advanced and the U.S. dollar declined against the euro, the yen and most other currencies.

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MARKET COMMENTARY  |  April 2016

World Markets Review for First Quarter 2016

Global equity returns were essentially flat as worries about slowing economic growth and falling oil prices sent markets plummeting in January and early February. Losses were tempered by a mid-quarter rally driven by improving U.S. economic data and new stimulus measures in China. Emerging markets regained some ground amid rebounding commodity prices. Bonds rose and the U.S. dollar declined against the euro, the yen and most other currencies.

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INVESTMENT INSIGHTS  |  March 2016  |  FEATURING Stephen Green & Andrew H. Dougherty

China Mired in Slow Growth, Major FX Move Unlikely

As the world’s second-largest economy, China is at an important turning point. China’s leadership has pledged to put the economy on the right track and be less opaque about its currency moves. Economist Stephen Green and China affairs specialist Andrew Dougherty discuss:

  • The outlook for China’s economy and why a soft landing is more likely
  • The case against China pulling the trigger on a big, one-time devaluation of its currency
  • Whether China’s leadership can manage the political and social implications of deep structural reforms
  • Pockets of strength in the Chinese economy during this transition to consumption-led growth 

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MARKET COMMENTARY  |  March 2016

World Markets Review for February 2016

Global stocks produced mixed returns amid investor concerns about a slowing global economy, low oil prices and ongoing turmoil in the banking sector. U.S. shares were flat, while European and Japanese markets lost ground. Emerging markets showed signs of stabilization as some commodity prices moved higher, boosting the materials sector. Investment-grade bonds advanced on safe-haven buying, and the U.S. dollar declined against the euro and the yen.

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INVESTMENT INSIGHTS  |  February 2016  |  FEATURING Mark A. Brett

The Dollar’s Ascent Could Be in Its Final Phase

Summary

  • The U.S. dollar’s five-year-long bull run may be coming to an end, particularly relative to major currencies such as the euro and the yen.
  • The headwind of a strong dollar should diminish for global and international stock portfolios.
  • Interest rate differentials and exchange rates do not always move in lockstep, so the Federal Reserve’s rate decisions won’t necessarily dictate what’s next for the dollar.
  • China’s apparent commitment to continue to devalue its currency is expected to cast a shadow over currencies in Asia and several other emerging markets.
  • As emerging economies adjust to weaker global industrial activity and Chinese growth that is slower and less commodity-intensive, some currencies may continue to weaken — but there are bright spots.

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MARKET COMMENTARY  |  February 2016

World Markets Review for January 2016

Global stocks tumbled into the new year amid worries about China’s slowing economy, rapidly falling oil prices and disappointing U.S. corporate earnings growth. Financial stocks experienced the sharpest declines, weighed down by concerns about risky loans in the energy sector and persistently low interest rates. Defensive stocks generally held up better. High-grade bonds rallied on safe-haven buying. The U.S. dollar rose against the euro, the yen and most other currencies.

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INVESTMENT INSIGHTS  | 
January 2016
 |  FEATURING Kevin G. Clifford & Robert W. Lovelace

Capital Group Hiring Where the World Is Going

American Funds portfolio manager Rob Lovelace discusses the investment group’s approach to hiring new research associates.

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INVESTMENT INSIGHTS  | 
January 2016
 |  FEATURING Kevin G. Clifford & John H. Smet

Fixed-Income Themes for ’16: Inflation, Quality

American Funds portfolio manager John Smet discusses areas of opportunity he sees for fixed-income investors looking ahead into 2016.

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INVESTMENT INSIGHTS  | 
January 2016
 |  FEATURING Kevin G. Clifford , Timothy D. Armour & Robert W. Lovelace

Investment Themes to Watch in 2016

American Funds portfolio managers Tim Armour and Rob Lovelace discuss investment opportunities in the emerging markets, oil and commodities, health care and pharmaceuticals, and the internet.

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INVESTMENT INSIGHTS  | 
January 2016
 |  FEATURING Kevin G. Clifford & Robert W. Lovelace

U.S., China Trade Places as Global Growth Engine

Portfolio manager Rob Lovelace offers his perspective on recovery and growth in China, the U.S., Japan, Europe and the emerging markets.

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MARKET COMMENTARY  |  January 2016

World Markets Review for 2015

Global stocks delivered essentially flat returns as investor enthusiasm for the U.S. economic recovery was offset by concerns over a sharp slowdown in China. Aggressive central bank stimulus measures continued to support markets in Europe and Japan, while the U.S. gradually stepped back from accommodative policies. Emerging markets stocks generally lagged their developed-market counterparts by a wide margin. Mergers-and-acquisitions activity reached a record high, fueled by cheap financing. 

Defensive stocks outpaced economically sensitive sectors. Health care and consumer staples stocks rallied, while energy and materials stocks plummeted amid falling prices for oil and other commodities. At the end of the year, the U.S. Federal Reserve raised interest rates for the first time in nearly a decade, setting the stage for tighter monetary policy in the years ahead. The U.S. dollar rose against the euro and most other currencies.

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MARKET COMMENTARY  |  January 2016

World Markets Review for Fourth Quarter 2015

Global stocks advanced amid surging M&A activity and a strong year-end rally in the technology sector. The Fed raised interest rates for the first time in nearly a decade, but cautioned that future rate increases would depend on the pace of U.S. economic growth. Conversely, central banks in Europe and Japan ramped up stimulus measures in an attempt to jumpstart lackluster economies. U.S. bonds fell and the dollar rose against the euro and the yen.

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INVESTMENT INSIGHTS  |  December 2015

Identify Investment Opportunities in a Slow-Growth World

Global Stocks Paused for Breath in 2015

Source: RIMES. As of October 30, 2015.

2016 Market Outlook, Article 1 of 6

One in a series of articles in which Capital Group portfolio managers offer their views on the current investing environment.

With China’s economic growth slowing and the Federal Reserve contemplating higher interest rates, it’s been a tough year in the financial markets. The MSCI World Index is essentially flat on a year-to-date basis amid rising volatility and widespread uncertainty over the outlook for 2016. A strong bull run over the prior seven years has also raised questions about valuations. Against this backdrop, several Capital Group portfolio managers offer their views on the current investing environment:

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MARKET COMMENTARY  |  December 2015

World Markets Review for November 2015

Global stocks produced mixed returns amid investor worries about sluggish economic growth and expectations for higher U.S. interest rates. European equities advanced on the promise of new monetary stimulus measures, however, U.S. stocks were flat and emerging markets retreated. Bonds also declined as Federal Reserve leaders indicated that a rate hike is likely in December. The dollar rose sharply against the euro and the yen.

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MARKET COMMENTARY  |  November 2015

World Markets Review for October 2015

Global stocks rallied as central bank stimulus and rising M&A activity helped offset ongoing concerns about a slowing world economy. Energy and materials stocks led markets higher amid signs of stabilization in commodity markets. Information technology stocks also advanced on better-than-expected earnings from some bellwether companies. Bonds were generally flat, and the U.S. dollar rose against the euro and the yen.

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INVESTMENT INSIGHTS  |  October 2015  |  FEATURING Brad Barrett

Changing Channels: Media’s New Direction

The landscape of media is undergoing a tectonic shift as the way people consume information, entertainment and even communicate with each other has been transformed by innovation and technology.

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Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses or the funds’ characteristics statement, which can be obtained from a financial professional or your relationship manager, and should be read carefully before investing. 

The Capital Group companies manage 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.

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. This information is intended to highlight issues and not to be comprehensive or to provide advice.