Global opportunity in new age giants
Global companies have grown in number and outpaced the broader market, according to international fund manager, Capital Group.
Capital Group investment director, Andy Budden, said the makeup of the world's most valuable companies by market capitalisation had rapidly changed over the past 15 years, and that was an opportunity for equity investors.
Companies that were most likely to flourish going forward would be those that had a high speed of product adoption, while they also had strong market muscle and distribution networks, Budden said.
Beyond the traditional giants such as ExxonMobile, Coca-Cola, and McDonalds, was a unique solution to a global problem — there was a rapid emergence of technology giants like Google, Apple, Facebook and Amazon, Budden said.
"What we've observed is that the more idea-driven companies, especially in technology and healthcare are showing greater profit margins. The opportunities for these companies to continue to grow rapidly are real and meaningful".
While the returns of companies on the FTSE Multinationals index exceeded the broader market, there was also an extra 220 multinational corporations from 2003 to 2015.
Multinational companies played a vital role in the global economy and accounted for 80 per cent of trade, 75 per cent of the private sectors research and development and 40 per cent of worldwide productivity growth.
Multinationals had also found success developing products in emerging markets, for example Unilever's water purifier that was developed in India was then on sold in Brazil, Mexico, Indonesia and Nigeria, Capital Group said.
Capital Group also noted that multinationals were establishing research and development centres in Asia to be closer to consumers.
Recommended for you
Fund managers may be operating in a squeezed environment, but a salary guide shows they are willing to pay up for specialist talent to diversify their fund range.
Reach Alternative Investments has entered into a strategic partnership with Russell Investments to bolster its wholesale private markets offering for financial advisers and investors.
Boutique investment consulting and research house Genium Investment Partners has announced a senior appointment to drive further growth in its research ratings business.
Nuveen has appointed a global head of estate, a successor to Chris McGibbon who steps down after almost 25 years.
