Emerging-Markets Focus a Plus for American Funds New World
This Gold-rated fund uses a multimanager system and has been resilient in downturns.
Alec Lucas: American Funds New World is the only diversified emerging-markets fund with a Morningstar Analyst Rating of Gold. It uses American’s signature multimanager system, dividing the fund’s asset base into separately run sleeves. In this case, eight equity managers, one balanced manager (tasked to buy stocks and bonds), and one fixed-income manager tap emerging-markets’ growth through a revenue-centric approach. As long as a firm gets at least 20% of its revenues or profits from the developing world, it's fair game here--provided that at least 35% of the fund's assets are invested directly in emerging-markets securities.
That makes for an interesting portfolio, and New World’s March 2019 asset mix was typical. It had a 4.5% bond stake in international bonds with revenues from emerging markets, 8% in cash, and the rest in an equity portfolio split roughly evenly between emerging-markets-domiciled companies and developed-market multinationals like top-five holding Alphabet. Alphabet profits from the growth of internet usage in developing countries like India, which means it meets the fund’s revenue requirements. Resiliency in downturns has been a key to this fund’s long-term success. It's beaten the benchmark over the trailing 12 years through March 2019.
Alec Lucas does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.