In this series of short profiles, we ask leading fund managers to defend their investment strategies, reveal their views on cryptocurrency, and tell us what they'd never buy.
This week our interviewee is Joanna (Jody) Jonsson, Portfolio Manager Capital Group New Perspective Fund, which has a Gold Rating from Morningstar.
Which Sector Shows the Biggest Promise in 2023?
We’re already more than halfway through 2023 and as we focus on longer time periods, it’s hard to make a call, but we’ve been shifting toward healthcare over the last three years. We continue to have high conviction in the sector for the next five years. I’m particularly interested in what I call "pick and shovel" companies – those firms who support a lot of other companies. For instance, Thermo Fisher does contract manufacturing and finishing of complex drugs for others, biotechs like Vertex are making breakthroughs in multiple areas and Zoetis is leading in the growth area of animal care.
What's the Biggest Economic Risk Today?
A big risk is that inflation is more persistent than currently believed, due to structural changes in the global economy. Non-cyclical factors such as geopolitical fragmentation, climate transition, supply chain restructuring and AI competition could cause ongoing shocks that make it difficult for the Fed to bring inflation back to target.
Describe Your Investment Strategy
I’m a PM on the Capital Group New Perspective Fund which this year celebrates its 50th anniversary. For this fund, I look for companies that benefit from changing global trade patterns. In practice, I’m looking for ‘global champions’, companies that are world-class, flexible, nimble and adaptable. Changes in trade patterns generally favour industry-leading multinationals that can adjust quickly to a changing landscape.
Which Investor/s Do You Admire?
Jon Lovelace, whose father founded Capital Group in 1931. Jon passed away in 2011 and was a brilliant investor, a genius at organizational design and a generous philanthropist whose legacy lives on today. He demonstrated integrity, humility, deep care for individuals and a long-term perspective, all of which I try to live out and pass on to others at Capital.
Name Your Favourite 'Forever Stock'
An all-weather holding for New Perspective Fund has been Nestlé. It has been part of the portfolio for about 35 years, and I’ve held it since I first came into the portfolio in 2006. As one of our analysts says, “Nestlé will never get your heart racing, but that is part of its attraction.” It has grown in good times and bad for over 150 years, and still continues to reinvent itself in innovative ways.
What Would You Never Invest In?
I won’t knowingly invest in companies whose products harm health or cause addiction.
Growth or Value?
It’s never all one or the other. Markets change, companies change – it’s important that I do the fundamental research on every company I invest in to make the best long-term decision with the information that I have. I am partial towards companies that compound steadily over the long term and the consistent returns they can offer investors, and this has been the New Perspective fund’s steady approach for the last 50 years since launch in 1973.
House or Pension?
The challenge is that one is purely an investment and the other is both an investment and a lifestyle choice. They should be thought of in different buckets. It’s fine not to be completely analytical about one’s own home.
Crypto: Brilliant or Bad?
In my view, crypto is a solution in search of a problem. There are still many issues to work out before it’s broadly useful to society.
What Can be Done to Improve Diversity in Fund Management?
More broadly within our industry, having associates with diverse opinions, backgrounds and experiences is critical to success. This is high on Capital Group’s agenda, and we pay particular attention to leadership accountability in promoting a culture of belonging. We need to create an environment in which everyone can participate freely and be heard and respected. Myself and other leaders within the firm are driving change to ensure we set the right tone.
Have you Ever Engaged with a Company and Been Particularly Proud (or Disappointed) in the Outcome?
I rarely go into an investment with a very precise outcome in mind; experience has taught me how much randomness there is in the world. I try to evaluate the quality of the business, the skill of the management and the degree of difficulty in the operating environment. But I aim where my odds of success are higher based on my experience. The way we invest, each portfolio manager makes his or her own decisions on what to invest in within the fund’s mandate. The magic is how we put together different investors with different styles and strengths to deliver successful, long-term outcomes with lower volatility. It’s a bit like a symphony orchestra. We are each trying to do something different and if we all played the same instrument, it wouldn’t sound very good. It sounds good because we’re each playing to our own strengths.
What’s the Best Advice You’ve Ever Been Given?
Don’t confuse a bull market with brains.
What Would You be if You Weren’t a Fund Manager?
A detective, a pilot, or a meteorologist.
