Globalisation is changing its shape leading to the emergence of new and ‘very different’ types of companies, according to Capital Group.
The company said that over the past few years it observed a shift in the nature of globalisation, which would prioritise research-driven companies and those relying on the flow of data and information over the traditional ones that mostly manufactured goods.
Capital Group’s investment director, Andy Budden, said: “What we are thinking today when we build the portfolio is really a changing shape of globalisation and the emergence of very different types of companies”.
He said the broad message was that the profile of multinational companies and the way they were operating and utilising technology would be very different.
He explained that the comparison of the top largest companies in the MSCI ACWI by market capitalisation already showed there was a clear pattern proving the shift was already happening, with the big financials, energy companies and leading consumer good providers being gradually replaced by companies that were “knowledge-intensive”.
“These are the type of the companies that they used to dominate the index but now they have dropped off and we’ve seen Apple, Amazon and Facebook appear,” he said.
Budden also stressed that a lot of discussions focused around technology but investing in multi-nationals “is not just about having technological product or service, but it’s also about the way they use technology to facilitate that traditional business”, such as distribution systems, among others.
The firm introduced its New Perspective Fund (NPF) to Australian investors around 12 months ago, which would focus on investments in multinational companies.
According to Capital Group Australia’s managing director, Paul Hennessy, the NPF fund was still relatively new to financial planners in Australia but “the strategy was getting recognition”.
He said the fund was currently available on seven platforms and was expected to be available on every major platform in the country by the end of the year.
