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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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INVESTMENT INSIGHTS  |  October 2015  |  FEATURING Timothy D. Armour

Digital Dollars: Ad Money Didn’t Waste Any Time Moving Online

Advertisers have flocked to the Internet and mobile as consumers change behavior

The face of the world’s media market is changing. Advertising dollars are increasingly flowing from traditional ads to digital. Increased spending on mobile, social media and digital video propelled U.S. digital advertising revenue to $49.5 billion for the full year of 2014, a 16% increase over 2013.

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INVESTMENT INSIGHTS  |  October 2015  |  FEATURING Jim S. Kang

Inflection Points Abound as Consumers Embrace New Technology

Streamers, gamers and cord-cutters are part of the landscape, but not point-and-shoot cameras

One need not look too far these days to find an example of how innovation can transform an industry. The charts above show a remarkable array of change, some of which are still evolving. Many gamers now play on mobile devices, not consoles. Most pictures are taken on phones, and most point-and-shoot cameras have been put on the shelf.

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Online and social media rival television as the main source of news in the U.S.

How people consume news has undergone a sea change. More people now get their news from digital sources than they do from either print newspapers or the radio, and digital is starting to make a move on TV as the dominant place people go for news.

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INVESTMENT INSIGHTS  |  October 2015  |  FEATURING Brad Barrett

Going Mobile: The Serious Business of Playing Games

With sales about to exceed $100 billion a year, video games are hardly kid stuff

In 2013, Grand Theft Auto V became the fastest-selling entertainment product of all time, with sales of $1 billion in just three days. That probably disabused most people of the notion that video games were kid stuff.

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INVESTMENT INSIGHTS  |  October 2015  |  FEATURING Andrei Muresianu

Has Streaming Turned Cable TV Into a House of Cards?

Netflix and others have redefined TV, but consumers are reluctant to cut the cord

Netflix can seem like a juggernaut. The company recently reported that it had 65.6 million subscribers at the end of the second quarter of 2015. Of those, 42 million are in the U.S. and another 23 million are international.

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MARKET COMMENTARY  |  October 2015

World Markets Review for Third Quarter 2015

Global stocks tumbled amid increasingly alarming signs of an economic slowdown in China and uncertainty over U.S. monetary policy. Energy and materials stocks plummeted on worries about declining global demand for commodities. Defensive sectors, including consumer staples and utilities, generally held up better than cyclical stocks. Government bonds rallied and the U.S. dollar slipped against the euro and the yen. 

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September 2015
 |  FEATURING Brad Barrett

Changing Channels: Media’s New Direction

Media analyst Brad Barrett discusses changes in the media landscape being brought about by changes in technology and innovative new business models.

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MARKET COMMENTARY  |  September 2015  |  FEATURING Timothy D. Armour & Rob Lovelace

Q&A With Portfolio Managers Tim Armour and Rob Lovelace

Perspective on Recent Market Selloff Triggered by China Woes

Global stocks have tumbled in recent days amid investor concerns about slowing economic growth in China. A sharp decline in Chinese stocks and a surprise currency devaluation have further stoked fears that the outlook for China is deteriorating, and events there could hurt its global trading partners, including Japan, Europe and ultimately the United States. China lowered interest rates and eased reserve requirements on banks in an attempt to calm investors and stimulate the economy. Against this backdrop, portfolio managers Tim Armour and Rob Lovelace share their thoughts on the unfolding events:

  • China now accounts for roughly 15% of the world’s gross domestic product and therefore has a greater impact than ever before on the global economy.
  • The most significant catalyst of the selloff was China’s unexpected decision to devalue its currency, delivering a shock to financial markets.

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September 2015
 |  FEATURING Wesley K.-S. Phoa

What the Fed’s Wait-and-See Mindset Means for Investors

A portfolio manager discusses the Fed’s decision to stand pat on interest rates in the context of the state of the U.S. economy, risks from abroad and implications for long-term investors.

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MARKET COMMENTARY  |  September 2015

World Markets Review for August 2015

Global stocks plummeted as fears that China’s economy may be weaker than previously expected hit every sector of the markets. Financial and consumer discretionary stocks fell the most, particularly those with high exposure to Asia. Defensive sectors, such as utilities and telecommunication services, fared somewhat better. High-grade bonds were essentially flat amid concerns about rising U.S. interest rates. The dollar lost ground against the euro and the yen. 

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MARKET COMMENTARY  |  September 2015  |  FEATURING Theodore R. Samuels

10 Observations About the Current Market Environment

Portfolio manager Ted Samuels puts the recent market volatility in perspective

One of my best pieces of advice for making it through volatile times in the market is to turn off the TV. After all, media commentators are focused on the here and now, not on how to build wealth over the long term. That said, periods of extreme market turbulence can be unnerving, so I would offer the following 10 observations about the current  conditions. 

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World Markets Review for July 2015

Global stocks advanced amid improving economic data in the United States and an easing of the Greek debt crisis. Defensive sectors led markets higher as consumer staples, health care and utilities stocks rallied. Emerging markets stocks declined, weighed down by a sharp drop in Chinese shares and falling commodities prices. High-grade bonds gained from a flight-to-safety trade. The U.S. dollar rose against the euro, the yen and most other currencies.

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INVESTMENT INSIGHTS  |  August 2015  |  FEATURING Shaw B. Wagener

The Future Is Under Construction

Urbanization is nothing new. It’s been going on for centuries, and it helped make Europe and the United States global economic and political powers. But what is different about today’s wave of urbanization is its unprecedented speed and scale — it’s bigger and faster than ever.

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INVESTMENT INSIGHTS  |  August 2015  |  FEATURING Joanna F. Jonsson

Urbanization Is Transforming the World — Again

Per Capita GDP Has Risen in Tandem With Increases in the Urbanization Rate

Source: Exhibit from Urban World: Cities and the Rise of the Consuming Class, June 2012, McKinsey Global Institute,, © McKinsey & Company. All rights reserved. Reprinted by permission. Urbanization is the increasing number of people living in cities as populations shift from rural to urban areas; the definition of urbanization varies by country. Pre-1950 data for the United Kingdom are estimated. Historical per capita GDP is expressed in 1990 Geary-Khamis dollars, which reflect purchasing power parity (PPP) that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency’s purchasing power. PPP helps determine the exchange rate adjustment so that identical goods and/or services in different countries have the same price when expressed in the same currency.

The wealth of nations soars when societies shift from rural to urban

Urbanization isn’t a modern phenomenon. In centuries gone by, the shift to living in cities underpinned the industrial revolutions of Europe and the United States and the rise of those regions to global economic and political power.

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INVESTMENT INSIGHTS  |  August 2015  |  FEATURING Joanna F. Jonsson

Getting Taller All the Time: Maybe the Sky Isn’t the Limit

2014 Was the “Tallest Year Ever,” With the Completion of a Record 97 Buildings Above 200 Meters

Sources: CTBUH Year in Review: Tall Trends of 2014, and Forecasts for 2015, Council on Tall Buildings and Urban Habitat; KONE Primer, CS European Capital Goods, May 2015, Credit Suisse. The total number of buildings completed for each year includes tall (600+ feet/200+ meters), supertall (900+ feet/300+ meters) and megatall (1,900+ feet/600+ meters) buildings; projected data for 2015 and 2016 represent expected, not possible, completions. The data for elevators and escalators are Credit Suisse estimates, based on company data as of fiscal year 2014, for new installations and maintenance.

The 3,281–foot Kingdom Tower in Saudi Arabia will be the world’s first kilometer–tall building

Elisha Otis founded The Otis Elevator Company in 1853, but it was the company’s 1903 innovation called the gearless traction elevator that set in motion a remarkable change in the urban landscape.

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INVESTMENT INSIGHTS  |  August 2015  |  FEATURING Andrew H. Dougherty

A $57 Trillion Bill for Infrastructure Is Coming Due

Global Investment (Trillions), 2013–2030

Source: Exhibit from Infrastructure Productivity: How to Save $1 Trillion a Year, January 2013, McKinsey Global Institute,, © McKinsey & Company. All rights reserved. Reprinted by permission. McKinsey calculated the estimate of
$57 trillion, or 3.5% of global gross domestic product, for global infrastructure need through 2030 by compiling projections of demand in the different infrastructure categories shown. The estimate for telecom covers only those members of the Organisation for Economic Co-operation and Development, plus Brazil, China and India. The estimated investment amounts, expressed in constant 2010 dollars, may not sum due to rounding. The constant dollar is an adjusted value of currency used to compare dollar values from one period to another.

The world faces a massive construction project just to keep up with projected growth

Some countries need infrastructure that simply meets basic human needs, such as safe drinking water. Another may want to modernize its transportation network, and still others may be trying to lay the groundwork for future global competitiveness by building a national broadband network.

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INVESTMENT INSIGHTS  |  August 2015  |  FEATURING Todd M. Saligman

The Secret to Keeping People in the Air? Groundwork

Airport Construction Projects Worldwide and Investment Amount (in Billions)*

*As of January 2015

Source: CAPA - Centre for Aviation, Premium Airports Database, Data are for existing airports with projects either in progress or planned for and with a good chance of completion.

Globally, $543 billion worth of airport construction projects are in progress

China started working on a new airport near Beijing on December 26, 2014. The airport, which is being designed by Netherlands Airport Consultants, is expected to be completed in 2018 and cost about 
$14 billion. Upon completion, the 7.5 million square foot terminal will accommodate about 45 million people per year.

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INVESTMENT INSIGHTS  |  August 2015  |  FEATURING Gregg E. Ireland

Africa Leapfrogs Landlines, and Takes a Shortcut to the Bank

Sources: 2014 State of the Industry: Mobile Financial Services for the Unbanked, March 2015, Groupe Speciale Mobile Association (GSMA); “Banks Vie for a Piece of Africa’s Mobile Banking Market,” August 15, 2014, The Wall Street Journal; Safaricom Limited FY15 Presentation. The GSMA Mobile Money report is available at The data for mobile financial accounts per 100,000 adults are as of June 2013. The total M-Pesa transactional value of $45 billion is for the fiscal year ended March 31, 2015.

Technological advances can allow countries to skip building out traditional infrastructure

Africa provides one of the classic examples of technology trumping traditional infrastructure. The introduction of mobile phones has allowed millions of Africans to receive the social and economic benefits of telephone networks without the sunk cost of massive landline infrastructure.

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World Markets Review for Second Quarter 2015

Global stocks produced mixed returns as signs of improving economic growth were offset by fears of rising interest rates and a worsening debt crisis in Greece. Telecommunications stocks proved to be a bright spot, driven higher by M&A activity, while the rate-sensitive utilities sector fell the most. Emerging markets stocks advanced, supported by monetary easing in China. Bonds declined and the dollar slipped 4% against the euro.

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INVESTMENT INSIGHTS  |  Mon Jun 01 13:38:00 PDT 2015

Recent Developments in the Greek Debt Saga

The situation in Greece remains very fluid. Unwilling to implement certain proposed austerity measures, the Greek government has rejected the proposal for an extension of the financial bailout package by its official creditors. That said, it is not a foregone conclusion that this will lead to a significant debt default or Greece’s exit from the eurozone.

Nevertheless, the possibility of both events has increased, leading to greater caution among investors and a flight to safer, more liquid financial assets. The next week is an important one and we will continue to monitor events closely. According to media reports, a last-ditch effort to broker a deal between the Greek government and its creditors may be underway.

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World Markets Review for May 2015

Global stocks managed a slight gain as investors reacted to mixed reports about the pace of worldwide economic growth. Technology and health care stocks rallied, while the energy sector continued to feel the impact of volatile oil prices on corporate earnings. Japanese stocks advanced on improving economic data. Emerging markets declined amid fears of higher U.S. interest rates. Bonds declined and the dollar rose against the euro and the yen.

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Can Smartphones Replace Cash and Cards?

Mobile payments see growing acceptance as volumes surge

Sources: BI Intelligence (both charts) and Boston Retail Partners (left chart). Data for mobile payment volume are estimates and those for payment types are as of 2015.

There’s a big payoff for the winner of the race to change the way you pay

Cash or check? How about smartphone. In 2014, customers in U.S. retail stores made an estimated $5.5 billion in purchases using a mobile device. That’s only about 0.1% of the nation’s sales. In 2019, however, shoppers are expected to spend an estimated $819 billion using a mobile device, or about 15% of sales, according to researchers at BI Intelligence.

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INVESTMENT INSIGHTS  |  May 2015  |  FEATURING David Carpenter

Digital Is Transforming the Music Business

Music Downloads Top the Charts

Source: Recording Industry Association of America. Data are based on year-end shipment statistics for the recorded music industry in the United States and represent the cumulative total of all four music formats shown in any given year. Units refers to the raw volume of products, which may be physical or digital, in a given category. Vinyl, cassettes, CDs and downloads all include both albums and singles.

iTunes rocked the industry, but streaming may represent another seachange

Yes, sales of vinyl records are surging — nearly 10 million old-fashioned platters were sold in 2013, the most since 1997. Who’s buying records? Mostly hipsters into indie-rock, and diehard audiophiles who contend vinyl recordings sound better than digital (among recent bestsellers on vinyl: Jack White’s Lazaretto and Beck’s Morning Phase). While it’s nice for old times’ sake to see vinyl win a battle, the war over how we listen to music may be over, and if digital hasn’t already won, the others may be down for the count.

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

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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.