the millennial generation - brooks macdonald/media/files/b/... · capital group cr-331580...

Insights into their influence

on the global economy

Q1 2019

The millennial

generationInsights into their influence

on the global economy

FOR PROFESSIONAL INVESTORS ONLY

This material is a financial promotion

Capital Group CR-331580 Millennials 1118

1997-2010

8-21

Who are millennials?

Sources: Capital Group, November 2018; Pew Research Center, March 2018; UN Population Division using 2015 data published in 2017

1981-961965-801946-641928-45

22-3738-5354-7273-90Age

2011-

<8

Gen.

Alpha

Generation

Z

1.9 bn

MillennialsGeneration

XBaby

Boomers

1.8 bn

1.4 bn1.3 bn

0.4 billion

Silent

0.7 bn

1

Capital Group CR-331580 Millennials 1118 2


UK millennials – an important generation

3

Estimates shown for illustrative purposes only. 1. Source: PIMFA, Brooks Macdonald

2. Source: RBC Wealth Transfer Report 2017

3. Source: Sanlam – The Generation Game, 2018 Report

£333 billion of assets expected to be passed to an estimated 300,000 inheritors over the next 10 years1

Many are unprepared to give or inherit their wealth

• Only 26% have a strategy to transfer their wealth2

• 31% of inheritors are even putting off saving because of a future inheritance2

• But, only 35% report being prepared before receiving wealth2

Financial education is largely informal and guided by family

• However, most believe that structured financial literacy programmes are more effective2

Millennials will still seek out advice when making financial decisions

• 76% of under-45s are looking to engage with a financial adviser when they receive

their inheritance3

• 4 out of 5 financial advisers see intergenerational transfer of wealth as the greatest

opportunity for their sector3


Why are they so important now?

Data shown are estimates. Used with permission.Source: Cerulli Associates: Cerulli Quantitative Update – Retail Investor Product Usage 2011 (based on data from Cerulli Associates, Federal Reserve, Center for Disease Prevention and Control, Current Population Study, Internal

Revenue Service).

Millennials and gen X stand to inherit $30 trillion over the coming decades

Investable assets transferred, US$ trillion (LHS) % of total US investable assets (RHS)

4


What characterises millennials?

Value experiences

over goods

Digital

natives

Social

awareness

Brand and

authenticity

5


First generation to grow up in a tech world

This information has been provided solely for informational purposes and is not an offer, or solicitation of an offer, or a recommendation to buy or sell any security or

instrument listed herein.1. Fall 2016 Ipsos Affluent Survey USA, Ipsos, September 2016

2. Qualtrics and Accel survey

3. Inc.com; April 2017

4. Worldwide; We Are Social; Hootsuite; Facebook; July 2018; 13 years and older; based on addressable ad audience

Weekly time spent online1

Hours

… but check their phone

around 150 times per day3

150

wake up at least once per night

to check their phone2

53%

of millennials claim to have

a healthy relationship with tech2 …

91%

of Facebook users are millennials4

30%Seniors 28.0

Baby Boomers 37.2

Generation X 45.4

Millennials 53.0

6


0

10,000

20,000

30,000

40,000

50,000

Apr 14 Apr 15 Apr 16 Apr 17 Apr 18

Japanese yen

Two case studies

Past results are not a guarantee of future results. This information has been provided solely for informational purposes and is not an offer, or solicitation of an offer, or

a recommendation to buy or sell any security or instrument listed herein.1. ‘The Netflix Generation’, Visual Capitalist, April 2017

2. Netflix Q4 2018 Shareholder Letter, 17 January 2019

Netflix: first or second choice for watching TV for

61% of millennials1

Paid

membership

+26%Revenue

growth

+35%Average

sales price

+6%

Investment thesis

• World’s leading subscription-based internet TV network, at

the forefront of the streaming trend

• Global expansion has been rapid – 139 million

subscribers in 190 countries2

Netflix growth

Year-on-year2

Nintendo: integrating mobile gaming into its

long-term strategy

Investment thesis

• Strong software growth boosted by a large number of

Switch console users and online subscription model

• Potential upside from mobile gaming in China

63 days for Pokémon GO to

make US$500m –

the fastest ever4

Nintendo: increasing share price over the past five years3

3. Datastream, 31 March 2019

4. Pokémon GO, to date the fastest mobile game to reach US$500 million in sales. App Annie, September 2018

7

Mar 19


Demanding innovation in mobile payments

Mobile payments use among smartphone owners2

1. FICO Survey: The Digital Generation: How technology is transforming the way consumers bank, 2016

2. The Pew Charitable Trusts, May 2016

Millennials and their finances1

use a financial institution’s

mobile app

72%use it daily

30%use the app

several times a week

66%

52%

43%

32%

11%

47%

38%

20%17%

33%

21%

15%11%

Make a purchase Pay bills Send or receive money Make a payment

using a text message

Millennials Generation X Baby Boomers

8


Shift in consumption patterns from goods to experiences

3.7

1.6

4.7

6.3

0

1

2

3

4

5

6

7 %

Average annual personal consumption expenditure

growth in US, 2014-16

Sources: US Bureau of Economic Analysis, McKinsey analysis, December 2017

1. ‘Experience-related services’ include the following Bureau of Economic Analysis service

categories: membership clubs, sports centres, parks, theatres, events, museums, casino

gambling, food services, accommodations, air travel, package tours, and foreign travel by

US residents.

Thinking about the next five years, which two or three of

the following are most important to you?

Millennials are spending differently to other generations

Total personal-

consumption

expenditure

Total

goods

Total

services

Experience-

related

services¹

Source: Airbnb and The Rise of Millennial Travel, Airbnb, November 2016

47

42

47

42

54

43

3438

71

47

52

12

0

10

20

30

40

50

60

70

80

Travelling Purchasing

a home

Purchasing

a car

Paying off

debt

%

US UK China

9


0

500

1,000

1,500

2,000

2011 2014 2017 2020 2023

US$ billion

Capturing growth in travel and online travel bookings

Past results are not a guarantee of future results. Estimates shown for illustrative purposes only. This information has been provided solely for informational purposes

and is not an offer, or solicitation of an offer, or a recommendation to buy or sell any security or instrument listed herein.OTAs: online travel agents

1. Annual sales growth for mobile booking as at 2016, Euromonitor, 2018.

2. Credit Suisse 2018 Online Travel Outlook

3. Annual report, Booking Holdings, Q3 2018

Booking Holdings: largest online travel agent in the world

Investment thesis

• Travel lodging is a growing

industry under-penetrated

by OTAs

• Appealing service to the

growing middle class and

increasing desire for

experiences

• Allied with Google and a

leader in marketing

efficiency

• Free cash flow has been

consistent and growing

Long-term tailwinds for Booking.com

Travel sales by channel1

21%annual sales growth expected

for mobile bookings 2015-201

40 million+downloads of

Booking.com apps3

50%of millennials used an

online travel agent to

book their last trip2

Travel

intermediaries

Total mobile

travel sales

Online

travel sales

Forecast

10


Millennials: driving companies to be more socially aware

1. The Future of Business Citizenship 2014 study, MSL Group, February 2014

2. 2015 Global Sustainability Report, Nielsen, October 2015

3. 2017 Sustainable Signals Report, Morgan Stanley, 9 August 2017

believe businesses should

be involved

in societal issues1

think businesses can

make a greater impact

addressing societal issues1

are willing to pay

more for sustainable

offerings2

as likely to invest

in companies

targeting social or

environmental goals3

83% 82% 3 out of 4 Twice

11


Millennials present new opportunities for global companies

Past results are not a guarantee of future results.1. Capital Group New Perspective strategy was launched in March 1973.

Value experiences

over goods

Social

awareness

Digital

natives

Brand and

authenticity

Powerful group of 1.8 billon people reaching their peak spending years

• With different values to other generations, established companies will need to evolve and adapt to continue to stay relevant to

this audience. Winning companies will have already start on this path.

• This powerful demographic group also presents opportunities for new companies to become global champions of tomorrow.

• For 45 years1 our analysts have been using bottom-up research to identify established and early-stage multinationals

benefiting from long-term global secular trends, allowing them to generate investment ideas that have delivered long-term

capital appreciation.

12


High exposure

in strategy to

Electronics

and computers

Key New Perspective

holdings

IBM

National Semiconductor

Intel

High exposure

in strategy to

E-commerce and

internet platforms

Key New Perspective

holdings

Amazon.com

Naspers

ASML

High exposure

in strategy to

Pharmaceuticals

and biotechnology

Key New Perspective

holdings

Pfizer

AstraZeneca

Novartis

High exposure

in strategy to

Telecoms

and media

Key New Perspective

holdings

Ericsson

Time Warner

News Corp

High exposure

in strategy to

Consumer products

and mining

Key New Perspective

holdings

Nestlé

Vale

POSCO

High exposure

in strategy to

Oil

and metals

Key New Perspective

holdings

Marathon Oil

StandardOil of California

Alcan Aluminium

A strategy that continues to be relevant over the long term

For over 45 years, New Perspective has identified companies that have driven and benefited from

changing global trade

For illustrative purposes only. This information has been provided solely for informational purposes and is not an offer, or solicitation of an offer, or a recommendation to

buy or sell any security or instrument listed herein. Holdings were top 20 positions in the representative account for the New Perspective strategy (inception: 31 March 1973) during the relevant periods. Not all of the companies referenced are currently held in Capital Group New

Perspective Fund (LUX), which was launched on 30 October 2015. Source: Capital Group

Early 70s

Basic resources

dominate

2010s

The age of

digital disruption

70s and 80s

The rise of home computing

and

personal electronics

Early 2000s

Innovation

in healthcare

1990s

A new generation

of mobile communications

2000s

The rise of emerging

markets and rapid

urbanisation of China

13


Capital Group New Perspective Fund (LUX): Top 20 holdings

NPF ADVISER NBB

The Capital SystemSM combines concentration and diversification in a single portfolio

This information has been provided solely for informational purposes and is not an offer, or a solicitation of an offer, or a recommendation to buy or sell any security or

instrument listed herein.Capital Group New Perspective Fund (LUX). Data as at 31 March 2019. Source: Capital Group

14

Holdings Sector Country Weight (%)

Number of portfolio

managers who hold

in their portfolio Date first held

Amazon.com Consumer Discretionary United States 3.8 6 Nov 07

Facebook Communication Services United States 2.6 5 Jul 15

Microsoft Information Technology United States 2.2 5 Jun 97

TSMC Information Technology Taiwan 2.2 6 Oct 97

Alphabet Communication Services United States 2.1 5 Aug 04

MasterCard Information Technology United States 1.8 3 Aug 11

Broadcom Information Technology United States 1.8 4 Dec 10

JPMorgan Chase Financials United States 1.5 4 Sep 01

Visa Information Technology United States 1.5 5 Nov 12

Netflix Communication Services United States 1.4 3 May 14

Intuitive Surgical Health Care United States 1.4 3 Aug 15

AIA Financials Hong Kong 1.4 4 Oct 10

ASML Information Technology Netherlands 1.4 6 Jun 00

Naspers Consumer Discretionary South Africa 1.3 5 Mar 10

CME Financials United States 1.2 4 Feb 12

Nestlé Consumer Staples Switzerland 1.2 4 Nov 88

Airbus SE Industrials France 1.1 4 Mar 07

Boston Scientific Health Care United States 1.1 2 Apr 14

Tesla Consumer Discretionary United States 1.1 1 Jul 14

Nike Consumer Discretionary United States 1.0 4 Jan 13

Total (%) 33.0

Capital Group

0

500,000

1,000,000

1,500,000

2,000,000

Mar 73 Mar 78 Mar 83 Mar 88 Mar 93 Mar 98 Mar 03 Mar 08 Mar 13 Mar 18

more wealth in $ terms4.6x

New Perspective¹

MSCI ACWI²

$1,869,100

$408,100

Annualised growth

since launch

Rebased to 10,000

Mar 73

12.0%

8.4%

New

Perspective¹

MSCI

ACWI²

higher than the

market return

3.6%

The value of a long-term perspectiveThe power of compounding excess returns

NPF Adviser NBB

Capital Group New Perspective Composite: The value of a hypothetical US$10,000 invested at launch

Past results are not a guarantee of future results. This information has been provided solely for informational purposes and is not an offer, or a solicitation of an offer,

or a recommendation to buy or sell any security or instrument listed herein. Data as at 31 March 2019. Capital Group New Perspective Fund (LUX) was launched on 30 October 2015. The investment results shown here are for the Capital Group New Perspective Composite (defined as a single group of

discretionary portfolios that collectively represent a particular investment strategy or objective). This is intended to illustrate our experience and capability in managing this strategy over the long term. Our Luxembourg fund has been

a member of this composite since the beginning of November 2015.

1. Results shown for the Capital Group New Perspective Composite, from inception at 31 March 1973, are asset-weighted and based on initial weights and monthly returns. Net of management fees and expenses for the Z share

class as a representative share class, applying the maximum Total Expense Ratio (TER) of 90bps, based on the long-term annual management charge of 75bps. Source: Capital Group

2. MSCI All Country World Index (ACWI) (net dividends reinvested) from 30 September 2011; previously MSCI World (net dividends reinvested). Source: MSCI

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.

15

What worked well in 2018?

• New Perspective outpaced the market over the 12-month period by

+3.6%1, as global markets returned -9.4%2.

• Positive excess return across sectors, with top contributors:

Amazon (price +28%), CME (+31%) and Boston Scientific (+43%)

• Long-term objective continues to be expressed through large

positions in IT, communication services and consumer-orientated

companies.

Capital Group

The millennial generation presents opportunities

Past results are not a guarantee of future results.1. Capital Group New Perspective strategy was launched in March 1973.

Value experiences

over goods

Social

awareness

Digital

natives

Brand and

authenticity

Powerful group of 1.8 billon people who will need to grow their wealth over time

• Key characteristics of millennial generation: 1) digital natives; 2) value experiences over goods; 3) very socially aware; 4)

attracted to brands and authenticity.

• Given different characteristics than previous generations, millennials will influence consumption patterns, the economy and

finance differently to previous generations.

• This significant cohort will require businesses, as well as financial advisers, to engage in new ways to identify their needs,

remain relevant and capture the significant opportunities their generation presents.

• Change is inevitable, as we have witnessed over 45 years1 of global investing and analysing changing patterns of global trade.

But this presents opportunity to take advantage of those changes and grow wealth for clients over the long term.

16

Capital Group

Appendix


Source: UN Population Division using 2015 data published in 2017

of millennials are

in emerging markets countries

86%A diverse population,

the same size as China,

US and Japan combined

millennials in China

– twice that of Europe and

five times the US

335 million1.8 billion

A powerful force in emerging markets … and globally

18


Internet platforms transforming media consumption


a recommendation to buy or sell any security or instrument listed herein.1. Adweek, 17 April 2017

2. Spotify Q4 2018 press release

3. MIDiA Research Music Subscriber Marketing Share Model, September 2018. ‘Other’ includes Deezer, Google Music, Pandora, MelON and others

Spotify: 72% of US listeners are millennials1

Music subscription revenue3 Market share of music subscription

services3Investment thesis

• The leading music

streaming service,

with 96 million paid

subscribers in

79 markets2

• Leveraging technology

and data to create better

listening experiences

• Network effects on the

platform have driven

subscriber growth

230

0

50

100

150

200

250

Q1

16

Q2

16

Q3

16

Q4

16

Q1

17

Q2

17

Q3

17

Q4

17

Q1

18

Q2

18

US$ million

Spotify

36%

Apple

Music

19%

Amazon

Music

14%

Tencent

Music

12%

Other

19%

19


Q119

Forecast

30

25

20

15

5

Changing patterns of media consumption


a recommendation to buy or sell any security or instrument listed herein. Forecast shown for illustrative purposes only. 1. ‘The Netflix Generation’, Visual Capitalist, April 2017

2. Netflix Q4 2018 Shareholder Letter, 17 January 2019

Netflix: first or second choice for watching TV for 61% of millennials1

Annual new Netflix subscribers globally2

Paid membership

+26%Revenue growth

+35%Average sales price

+6%

Investment thesis

• World’s leading

subscription-based

internet TV network,

at the forefront of

the streaming trend

• Global expansion

has been rapid –

139 million subscribers in

190 countries2

• Digital platform offers

ability to scale at a low

cost per incremental

subscriber Netflix growth

Year-on-year2

0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2018

2017

20162015

millions

20

10


0

10,000

20,000

30,000

40,000

50,000

Apr 14 Apr 15 Apr 16 Apr 17 Apr 18

Japanese yen

Mobile gaming forecast to be a $100bn market by 20211


a recommendation to buy or sell any security or instrument listed herein.1. Estimate shown for illustrative purposes only. Source: Global Games Market Report, Newzoo, April 2018

2. Datastream, 31 March 2019

3. Pokémon GO, to date the fastest mobile game to reach US$500 million in sales. App Annie, September 2018.

Nintendo: integrating mobile gaming into its long-term strategy

Nintendo: increasing share price over the past five years2

for Pokémon GO

to make US$500m –

the fastest ever3

63 days

Investment thesis

• Strong software growth

boosted by a large

number of Switch console

users and online

subscription model

• Increasing digital sales of

software have helped to

boost margins

• Potential upside

from mobile games,

growth in China,

and intellectual property

monetisation

opportunities

21

Mar 19


Security

Millennials present new challenges for financial firms

MasterCard: leveraging data and technology to build innovative solutions


a recommendation to buy or sell any security or instrument listed herein.Sources: MasterCard, Capital Group

Control

MasterCard Assemble

online money

management

Investment thesis

• Beneficiary of increasing

penetration of card,

contactless and

smartphone payments

across the globe

• Has delivered

consistently strong

earnings growth,

supported by the secular

shift to digital payments

• Strong management

team and technology

leadership

Qkr

mobile ordering

and payment

PromptPay

peer-to-peer

payment system

MasterPass

digital wallet for faster

checkouts

MasterCard believes there are three main things that any solution targeting millennials

must deliver:

Simplicity

22


10.5

57.4

156

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

Millennials

67%

Other

32%

A key driver of the Chinese tourism boom

1. China Outbound Tourism Research Institute, November 2018. Percentage increase based on 2000 and 2018 visits; 2018 figure is forecast and shown for illustrative purposes only.

2. Chinese Tourism Cities Federation, 2014

3. Criteo New Digital Traveller Report, January 2018. Grey area of chart represents ‘other’ at 2%.

Annual Chinese overseas visits

Millions1

Technology used for travel booking in

China3

increase in

Chinese tourists

1,380%

Chinese tourists by generation2

Desktop 24%Desktop 15%

Laptop 21%

Laptop 23%

Tablet 3%Tablet 5%

Browser 8%Browser 8%

App 43% App 47%

23


Multiple factors boosting long-term growth opportunities

Ctrip: the dominant online travel platform in China

Investment thesis

• Established market-

leading position through

superior brand and

technology

• Ctrip forecasts that online

travel market growth will

outpace China’s GDP

growth of 6% p.a1

• Growth of international

Chinese travel expected to

drive revenues

• Potential benefit from

2016 acquisition of

Skyscanner

Past results are not a guarantee of future results. This information has been provided solely for informational purposes and is not an offer, or solicitation of an offer, or a

recommendation to buy or sell any security or instrument listed herein. Forecast shown for illustrative purposes only.1. Quarterly report, Ctrip, Q4 2018

2. Datastream, April 2019

Expanding

middle class

Growing Chinese

travel market

Rising share of

travel sold online

24

70

73

76

79

82

85

0

1000

2000

3000

4000

5000

6000

Apr 2009 Apr 2011 Apr 2013 Apr 2015 Apr 2017 Apr 2019

Revenues, in millions US$ (LHS) Gross margin % (RHS)


Companies seeing value in sustainability

Past results are not a guarantee of future results. This information has been provided solely for informational purposes and is not an offer, or solicitation of an offer, or a

recommendation to buy or sell any security or instrument listed herein. 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. The information provided is not intended to be comprehensive or to provide

advice.1. Nike 2018 Sustainability Report

2. Ratings for digital competence and ability to creatively interact with consumers on multiple devices and online environments. Source: Digital IQ, January 2015

3. Nike Q1 2019 quarterly results transcript. Sevenfold increase in relation to 2018 revenues.

Nike: innovating in sustainability and connecting digitally to consumers

Investment thesis

• Transforming into a more

digitally led, direct selling

enterprise with potentially

higher growth prospects

• Increasing pace of

innovation, with a flow of

launches across multiple

product lines

• Maintained young target

market through bold

marketing and product

innovation

Nike Grind 71%of Nike footwear and apparel

products contain Nike Grind

materials1

Nike Flyknit 60%less waste than traditional cut-

and-sew methods1

Lower material costs = Higher margins Higher sales and lower inventories

“Sustainability initiatives like the use of recycled shoes will be a very

marketable innovation to young consumers who care deeply about big

brands’ environmental impact.”

• #1 US sportswear brand in “digital

competence”2

• 36% digital growth. Digital was

the company’s fastest-growing channel in

every geography3

• $7 billion targeted e-commerce revenues

by 2020, a sevenfold increase3

Example sustainability practices Digital key to growth

Beth Schulte

Investment

analyst

25


Millennials demanding authentic and engaging brands

1. Stackla, November 2017

2. Ipsos, May 2017

3. 2017 Global Brand Research Survey, Astound Commerce, August 2017

value an engaging online

experience with a strong sense

of product and brand3

45%

favour user-generated content

(reviews, QAs, etc.)3

45%

stay updated on brands

via social media2

63%

value the option to connect

via live chat3

31%

of millennials say

authenticity is important

to them when deciding

which brands they

support1

90%

26


Digitally focused brands winning over millennials

The most popular retail and consumer brands in the US

This information has been provided solely for informational purposes and is not an offer, or solicitation of an offer, or a recommendation to buy or sell any security or

instrument listed herein.Source: YouGov, November 2018

Baby Boomers Generation X Millennials

1 Band-Aid

2 WD-40

3 Ziploc

4 M&M’s

5 Hershey’s

1 M&M’s

2 Reese’s Peanut Butter Cup

3 Ziploc

4 Band-Aid

5 Kleenex

1 Amazon.com

2 Netflix

3 Nintendo

4 Oreo

5 YouTube

27

Capital Group CR-331580 Millennials 1118SM.2505464_247

CG investment analysts

• Specialists in one or two sectors, and cover the same sector

for at least a decade.

• They generate investment ideas that form the core of a

portfolio’s construction.

Clusters develop industry insights

• Sector analysts form broader industry-specific groups (e.g.

technology cluster) across the world.

• By sharing perspectives they build on the research conducted

by others, reaching a deeper level of group knowledge and

insights.

Swarms explore thematic trends

• Brings together investment professionals across different

sectors to swiftly dive into a new trend.

• Allows us to identify important trends early on and focus on

the clusters that are most impacted.

We criss-cross the world to cross-reference our views

Global research drives deep industry knowledge

28

Capital Group

New Perspective strategyOver 45 years of uncovering opportunities arising from shifting global trade patterns

What differentiates New Perspective?

Time-tested over 45 years

Investing in a combination of both

established and early-stage multinational

companies

No structural investment style or factor bias

Downside protection over lifetime1

A history of very strong long-term absolute

returns2

Why is this relevant now?

Significant structural changes to global

economy and investment landscape

An attractive combination of resilience

and growth

Flexibility – not reliant on “growth stocks” to

perform well

Volatility is back

There are always reasons not to invest

Past results are not a guarantee of future results. Data as at 31 March 2019. Based on returns in US dollars. Capital Group New Perspective Fund (LUX) was launched on 30 October 2015. The investment results referenced here are for the Capital Group New Perspective

Composite (defined as a single group of discretionary portfolios that collectively represent a particular investment strategy or objective). This is intended to illustrate our experience and capability in managing this strategy over the

long term. Our Luxembourg fund has been a member of this composite since the beginning of November 2015.

1. A down market is defined as at least a 20% cumulative drop in market value. Based on rolling monthly three-year relative returns calculated geometrically for the Capital Group New Perspective Composite (from inception at 31

March 1973), compared with the MSCI All Country World Index (ACWI) (net dividends reinvested) from 30 September 2011; previously MSCI World (net dividends reinvested). Net of management fees and expenses for the Z

share class, applying a Total Expense Ratio (TER) of 90bps, based on the long-term annual management charge of 75bps. Annualised returns for periods of more than 12 months. Sources: Capital Group, MSCI

2. Refers to results for the Capital Group New Perspective Composite, from inception, which are asset-weighted and based on initial weights and monthly returns. Net of management fees and expenses for the Z share class as a

representative share class, applying the maximum Total Expense Ratio (TER) of 90bps, based on the long-term annual management charge of 56.5bps. Source: Capital Group

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.

29

Capital Group

Year Fund1 Benchmark 2 Excess return 3

2015 2 months -1.3 -2.6 1.3

2016 1.4 7.9 -6.4

2017 28.2 24.0 4.2

2018 -6.3 -9.4 3.1

2019 3 months 13.8 12.2 1.6

Annualised lifetime return

(3 years 5 months 1 day) 9.6 8.5 1.1

Year Fund 1 Benchmark 2 Excess return 3

2017 13.8 15.0 -1.3

2018 19.4 14.8 4.6

2019 4.9 2.6 2.3

1 year 4.9 2.6 2.3

3 years p.a. 12.5 10.7 1.9

Total value of Capital Group New Perspective Fund (LUX)

as at 31 March 2019 is US$ 4,236 million

Capital Group New Perspective Fund (LUX)Investment results as at 31 March 2019 in US$ terms (after fees and expenses — Z share class)

Results summary, % Rolling 1 year results to 31 March, %

© 2019 Morningstar. All rights reserved.

Morningstar Rating™ as at 28 February 2019. Class Z in USD.

Morningstar Analyst Rating™ as at 10 October 2018.

Morningstar category: Global Large-Cap Growth Equity.

Past results are not a guarantee of future results.Lifetime: 30 October 2015 - 31 March 2019.

1. After management fees and expenses for the current Total Expense Ratio (TER) of the Z share class, as a representative share class, which has a maximum TER of 90bps. Fund results are based on close of market

returns (T+1). Source: Capital Group

2. The benchmark shown is MSCI ACWI (with net dividends reinvested). Source: MSCI

The excess return is calculated arithmetically.3.

The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither

Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. For more detailed information about

Morningstar’s Analyst Rating, including its methodology, please go to:

www.morningstar.com/content/dam/marketing/shared/research/methodology/778136_Morningstar_Analyst_Rating_for_Funds_Methodology.pdf. For disclosure and detailed information about this fund please

refer to full Morningstar Global Fund Report atwww.capitalgroup.com/content/dam/cgc/tenants/europe/documents/morningstar/NPF_Mstar_Analyst_Report(en).pdf.

25

Capital Group

Past results are not a guarantee of future results.As Capital Group New Perspective Fund (LUX) was launched on 30 October 2015, a meaningful track record has yet to be established, so the investment results shown here are for the Capital Group New Perspective Composite

(defined as a single group of discretionary portfolios that collectively represent a particular investment strategy or objective). This is intended to illustrate our experience and capability in managing this strategy over the long term.

Our Luxembourg fund has been a member of this composite since the beginning of November 2015.

NPF.2247569_668

Composite information in US$New Perspective

Annual composite Annual Annualised 3 yr Annualised 3 yr Annual Number of Assets in Total GIPS

gross benchmark composite standard benchmark standard composite portfolios composite Firm assets

return return deviation deviation dispersion in composite (millions) (millions)

Year % % % % %

2009 38.4 30.0 20.5 21.4 - - 43,835 1,180,449

2010 13.7 11.8 22.5 23.7 - - 46,030 1,228,573

2011 -6.9 -5.9 19.2 20.2 - - 39,229 1,084,964

2012 21.7 16.1 16.3 17.0 - - 44,112 1,144,251

2013 27.8 22.8 13.3 13.8 - - 55,918 1,336,777

2014 4.0 4.2 10.5 10.5 - - 56,600 1,395,198

2015 6.1 -2.4 10.6 10.8 - - 60,194 1,389,111

2016 2.6 7.9 10.9 11.1 - - 60,893 1,477,471

2017 29.8 24.0 10.3 10.4 - - 80,434 1,774,963

2018 -5.2 -9.4 11.2 10.5 - 6 79,472 1,673,038

31

Capital Group NPF.2247569_668

Composite information in US$New Perspective Disclosure and Fees

Compliance

The Capital Group Companies ("Capital Group") claims compliance with the Global Investment Performance

Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Capital

Group has been independently verified by Deloitte & Touche, LLP for the periods

1 January 2008 to 31 December 2014. The verification report is available upon request. Verification assesses

whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a

firm-wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in

compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite

presentation.

Firm definition

The "Firm" is defined as Capital Group and includes all portfolios, excluding Capital International Private Equity

Funds ("CIPEF"), managed within its subsidiaries and divisions. The Firm manages 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

organisation; however, for securities with equity characteristics, they act solely on behalf of one of the three

equity investment groups.

Composite

The composite consists of all discretionary portfolios that are managed to the global capital appreciation

strategy, with a focus on companies with exposure to global trade patterns. The strategy seeks to provide long-

term growth of capital with a secondary objective of future income. Portfolios included in the composite primarily

diversify among blue chip companies in the United States and abroad, emphasising multinational or global

companies and focus on opportunities generated by changes in global trade patterns and economic and political

relationships. Composite inception date is 1 April 1973. Composite creation date is 31 March 2013.

Presentation of results and fees

Composite results reflect the reinvestment of dividends, interest and other earnings. Results are 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 gross results are presented before

management fees but after all trading expenses. The composite may include portfolios with gross results that

reflect the deduction of certain administrative fees. Actual fees may vary depending on, among other things, the

applicable fee schedule and portfolio size. Past performance does not guarantee future results. The starting

annual management fee rate for an investment from an institutional investor in New Perspective is 0.75%. Other

fee rates may apply depending on the investment vehicle, size of investment and investor profile.

Index

Index represents the MSCI World Index through 30 September 2011 and the MSCI AC World Index thereafter.

Index results are net of withholdings taxes on dividends, interest and capital gains. Indices were obtained from

published sources and have not been examined by an independent accounting firm.

Standard deviation

The annualised three year standard deviation measures the variability of the returns over the preceding 36-month

period. Standard deviation is not presented for periods where 36 monthly composite returns are not available.

Annual composite dispersion

The composite dispersion measure presented is the asset-weighted standard deviation. This is a measurement of

internal dispersion that represents the distribution of individual portfolio returns around the asset-weighted mean.

Portfolios are only included in each dispersion calculation if they are present in the composite for the entire period.

The asset-weighted standard deviation dispersion measure is included for full calendar years except where the

composite contains five portfolios or less for the full year.

Number of portfolios

Periods that end with five portfolios or less are not presented.

Exchange rates

For periods prior to 1 January 2011, the Firm's portfolios may use the Reuters Closing Spot Rates taken at 4:00

p.m. London time or the Reuters Spot Rates taken at 11:00 a.m. Pacific time as sources for exchange rates. The

majority of composite benchmarks, published by index providers, use the Reuters Closing Spot Rates taken at

4:00 p.m. London time as source for exchange rates. In addition, the Firm uses the WM Closing Spot Rates taken

at 4:00 p.m. to convert composites and benchmarks from base currency into any other reporting currency.

Valuation

The Firm's valuation policy, although in accordance with the GIPS Valuation Principles, may allow for some

differences among portfolios within the composite based upon whether a given portfolio adjusts the values of

certain non-US securities based on certain US market movements.

GeneralA complete list and description of firm composites and policies for valuing portfolios, calculating performance, and

preparing compliant presentations are available upon request. GIPS® is a trademark owned by CFA Institute. This

material is designed for use solely by Qualified Purchasers, institutional investors and consultants. It may not be

disseminated to or used by individual plan participants or retail investors.

32

Capital Group CR-331580 Millennials 1118Capital Group

Regulatory information

Capital International Management Company

Sàrl (CIMC)

Registered office:

37A, avenue J.F. Kennedy

L-1855 Luxembourg

+352 27 17 621 Telephone

+352 27 17 6290 Facsimile

capitalgroup.com

Registered in Luxembourg, number:

R.C. B 41.479

© Copyright 2019. All rights reserved.

This material, issued by Capital International Management Company Sàrl (“CIMC”), 37A avenue J.F. Kennedy, L-1855 Luxembourg, is distributed for information purposes only. CIMC is regulated by the

Commission de Surveillance du Secteur Financier (“CSSF” – Financial Regulator of Luxembourg) and manages the fund(s) which is a (are) sub-fund(s) of Capital International Fund (CIF), organised as an

investment company with variable capital (SICAV) under the laws of the Grand Duchy of Luxembourg and authorised by the CSSF as a UCITS. All information is as at the date indicated unless otherwise

stated and subject to change.

For Austria: A full list of Paying Agents is located on the website stated. This fund(s) may only be appropriate for long-term investment.

For Denmark: The fund is recognised by Finanstilsynet (Danish FSA) for distribution to the public in Denmark.

For Finland: The fund is recognised by Finanssivalvonta - Financial Supervisory Authority (FIN-FSA) for distribution to the public in Finland.

For France: The details of the correspondant centralisateur are provided on the website stated.

For Germany: A full list of Paying Agents and Distributors is located on the website stated. All legal documentation mentioned in this disclaimer are available in hard-copy and free of charge from the

Paying Agent.

For Ireland: Copies of the Prospectus, the Key Investor Information Document, the annual and semi-annual reports are available on simple request and free of charge in English at the facilities agent

J.P. Morgan Administration Services (Ireland) Limited, J.P. Morgan House International Financial Services Centre, Dublin 1, Ireland as well as on capitalgroup.com/europe where the latest daily

prices are also available. Income may fluctuate in accordance with market conditions and taxation arrangements. Past performance may not be a reliable guide to future performance. Changes in

exchange rates may have an adverse effect on the value price or income of the product. The Prospectus and Key Investor Information Document set out risks, which, depending on the fund, may

include risks associated with investing in emerging markets and/or high-yield securities these emerging markets are volatile and may suffer from liquidity problems.

For Italy: A full list of Paying Agents and Distributors is located on the website stated. The source of data, statistics or graphs in the factsheets is Capital Group, unless otherwise stated.

For Norway: The fund is recognised by Finanstilsynet the Financial Supervisory Authority of Norway for distribution to the public in Norway.

For Spain: To obtain a list of distributors of the fund please visit CNMV.es. Capital International Fund (CIF) is registered with the Comisión Nacional del Mercado de Valores ('CNMV') under the

number 983.

For Sweden: The fund is recognised by Finansinspektionen (FI) for distribution to the public in Sweden. The representative agent in Sweden is Nordea Bank AB, Smålandsgatan 17, 105 71

Stockholm, Sweden.

For Switzerland: the Representative in Switzerland: Capital International Sàrl, 3 place des Bergues, 1201 Genève. Paying agent in Switzerland for CIF, CGEMGLU, CIP: JPMorgan (Suisse) SA, 8 rue de

la Confédération, 1204 Genève.

For UK: Most protections provided by the UK regulatory system do not apply to investment in the fund and compensation will not be available under the UK Financial Services Compensation Scheme.

You should contact a financial adviser, and read carefully the latest Prospectus, Key Investor Information Document and Supplementary Information Document, including without limitation, the

section on the risks as referenced below, if you are considering investing. Approved for issue in the United Kingdom by Capital International Limited, Registered office 40 Grosvenor Place, London

SW1X 7GG. Authorised and regulated by the Financial Conduct Authority.

Risk factors you should consider before investing:

• This material is not intended to provide investment advice or be considered a personal recommendation.

• The value of investments can go down as well as up and you may lose some or all of your initial investment.

• Past results are not a guide to future results.

• If the currency in which you invest strengthens against the currency in which the underlying investments of the fund are made, the value of your investment will decrease.

• The Prospectus and Key Investor Information Document set out risks, which, depending on the fund, may include risks associated with investing in fixed income, emerging markets and/or high-

yield securities; emerging markets are volatile and may suffer from liquidity problems.

Other important information

The fund(s) is (are) offered only by Prospectus, together, with the Key Investor Information Document. The Prospectus, latest annual and semi-annual reports (available in English), the KIIDS

(available in the following languages; Danish, English, French, German, Italian, Norwegian, Portuguese, Spanish and Swedish) for other share classes and latest daily prices are available free of

charge from capitalgroup.com/europe. These documents, together any documents relevant to local legislation, contain more complete information about the fund(s), including relevant risks,

charges and expenses, and should be read carefully before investing. However, these documents and other information relating to the fund(s) will not be distributed to persons in any country where

such distribution would be contrary to law or regulation. They can be accessed online at www.capitalgroup.com/europe, where latest daily prices are also available.

The tax treatment depends on individual circumstances and may be subject to change in future. Investors should seek their own tax advice. This information is neither an offer nor a solicitation to

buy or sell any securities or to provide any investment service.

CIMC.1297841_777

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