Capital Group’s head of UK client group Chris Miles on the case for balanced global portfolios, blending public and private assets and helping clients strengthen their businesses
Where – and why – are you anticipating demand or fund-flows from UK-based wealth managers and their clients over the next 12 months?
As markets continue to broaden, we expect global diversification to remain front-of-mind for UK wealth managers and their clients. After an extended period of narrow leadership, there is a growing recognition that opportunity is widening across regions and asset classes – and portfolios need to evolve accordingly.
That shift closely reflects the themes set out in our Great Global Restructuring research, which highlights how changes in global trade and capital flows, the rise of productivity enhancing technologies such as AI, and questions around US debt and the dollar are reshaping the investment landscape.
Against that backdrop, while the US remains a core allocation, relative opportunities outside the US are becoming increasingly compelling, reinforcing the case for a more balanced, global approach to portfolio construction.
US exposure will remain a key component of portfolios, given its scale and continued role in innovation and earnings growth. That said, helping clients think carefully about how those allocations are positioned, rather than relying on concentration by default, is increasingly important. Periods of heightened uncertainty often create long term opportunities for active investors, particularly where markets are reassessing assumptions around growth, productivity and leadership.
We are also seeing sustained interest in fixed income – especially global fixed income strategies. Macro uncertainty places a premium on active, research led and dynamically allocated approaches, with investors looking once again to the asset class for diversification and income.
How are you planning to address and serve that interest?
Our aim is to be a long term partner of choice for UK wealth managers and advisers – both from an investment perspective and a business support standpoint. Over the past decade, we have expanded our UK offering with tried, tested and relevant strategies, including the launch of a growing number of OEICs across key asset classes – most recently bringing one of our US equity strategies with 90-plus years of track record to the UK market. We are also offering our investment expertise across a wider range of vehicles to meet evolving client needs.
And yet partnership goes beyond investing. We support our clients with a rich ecosystem of insights and education. Our Capital Ideas platform offers weekly articles and podcasts featuring both portfolio managers and deep-dives into market themes with our investment analysts. We have also built Capital Learning, a training hub that helps advisers stay ahead on the topics that matter most to their clients.
Capital Group has been in the UK since 1979 and today we have a substantial on the ground presence. That longevity matters. As a privately owned firm, we are able to take a genuinely long term view, investing consistently in our people, our investment capabilities and our client relationships, without the pressure of short term external shareholders.
Our investment approach is built around teams rather than individuals, meaning our funds are not dependent on any single key person. This structure supports continuity, resilience and consistency for clients over time, and underpins our focus on long term thinking rather than short term solutions.
Are you seeing a divergence in the demands of UK wealth managers versus, for example, their peers in Europe or on the institutional side in the UK?
There are clear structural differences between the UK and continental Europe – particularly in domestic asset class preferences and distribution models. Europe tends to be more bank led and advisory, whereas the UK market remains more discretionary in nature.
That said, one of the most interesting trends in the UK is the long running convergence between wealth and institutional investors. As defined benefit schemes continue to shrink and wealth management consolidates, the distinction between ‘retail’ and ‘institutional’ buyers is becoming less clear. Larger wealth firms increasingly resemble institutions in how they approach governance, fund selection and asset allocation.
Across all client types, the challenge of navigating increasingly concentrated equity markets is shared. Our approach is therefore client driven. We tailor how we service wealth managers and institutional investors but the underlying philosophy – focused on long term outcomes and disciplined investment – is consistent.
As a business, how do you define ‘alternative’ and ‘private’ assets and to what extent should asset managers be looking to service investor demand here?
Private assets are relatively easy to define, but the term ‘alternatives’ covers a wide range of asset types and can mean very different things to different investors. For us, the distinction is less about labels and more about outcomes. We think in terms of how private assets can provide differentiated sources of return, how they interact with public markets and how they can be used thoughtfully within a broader portfolio.
The opportunity to improve portfolio characteristics through greater diversification, is a key reason why we place a strong emphasis on blended public private approaches, rather than viewing private markets in isolation.
Combining liquid public assets with selective private market exposure can expand the opportunity set, particularly in areas such as credit, while preserving a degree of liquidity and portfolio flexibility. The aim is not complexity for its own sake but diversification, income potential and improved risk adjusted outcomes over time.
Asset managers should absolutely help meet growing investor demand in this area, but they also have a responsibility to ensure clients understand how these investments work and where they fit within a portfolio, so education is an essential part of any proposition. A measured, transparent and client centric approach is ultimately far more important than simply responding to demand.
‘ESG is dead – long live ESG 2.0’ – your thoughts as a distributor, please?
I don’t see that interest in ESG issues has disappeared. Investor expectations have matured in recent years but we see strong, continued demand for ESG. In my experience, clients are focused on materiality and want to see greater evidence of how ESG issues are considered as part of the investment process. I am also seeing increasing expectations for high-quality reporting and transparency.
In our latest annual ESG study, which surveyed more than 1,100 institutional investors and intermediaries worldwide, nine out of 10 EMEA respondents indicated they integrate ESG considerations into their investment strategies. The survey indicated that heightened geopolitical risks, regulatory uncertainty and economic growth concerns continue to pose challenges for the sector.
Nevertheless, a substantial majority – more than 90% of respondents who have already integrated ESG considerations – have either maintained or increased their allocation to strategies incorporating ESG or sustainable investment criteria over the past year and intend to keep or further grow these allocations in the coming 12 months.
I am seeing a number of developments in investor approaches. The consideration of ESG issues in corporate bonds is gaining traction, supported by improved data availability. Our study also suggests investors are increasingly discerning when it comes to the performance of strategies with ESG or sustainable investment criteria, recognising the benefits of multi-thematic strategies over single-thematic ones, including diversification and adaptability to changing market conditions.
What drives your approach to client communication? And is there a case for focusing on attracting the ‘right’ type of client?
Our approach is rooted in being active at the core, long only and long term in mindset. That naturally shapes how we communicate. We place a high premium on advice and guidance, focusing less on short term noise and more on helping clients make confident decisions through cycles.
At its best, client communication should be about partnership. If we can help our clients strengthen their businesses – whether that is supporting portfolio construction, client retention or navigating periods of uncertainty – then growth follows on both sides. That long term alignment really matters.
And, yes – there is also a strong case for focusing on the ‘right’ type of client. Relationships work best when they are grounded in shared horizons and values.
“If we can help our clients strengthen their businesses – whether that is supporting portfolio construction, client retention or navigating periods of uncertainty – then growth follows on both sides.
Grand Prismatic Spring, Yellowstone National Park
Outside of work, what is the strangest thing you have ever seen or done?
Not so much strange as adventurous. At 18, in the late 1990s, I lived in a mud hut and travelled overland from Tanzania to Cape Town and back again. It was an incredible experience. No mobile phones, no debit cards, just a money belt full of travellers’ cheques (anyone remember those?). Looking back, my parents seemed remarkably relaxed about it all!
More recently, my sense of adventure has been a little closer to home. A few years ago, we visited Yellowstone National Park, which is unlike anywhere else. It is one of the most volcanically active places on earth- and seeing the Grand Prismatic Spring with your own eyes is something you really don’t forget.
May we have two book recommendations, please – ideally, one with an investment connection?
Outside of finance, Prisoners of Geography by Tim Marshall is a favourite. I studied geography and I have always been interested in how maps, history and physical constraints shape politics and economics. Marshall actually spoke at one of our Capital Ideas Live events a few years ago, which brought many of those themes to life in a very engaging way.
I would also highly recommend Charles Ellis – either Capital or What It Takes – to anyone interested in long term investing and what really drives enduring success.
Gazing into your crystal ball, what does the asset management sector look like 10 years from now?
Consolidation will continue, among both asset managers and wealth clients. Investors will work with fewer managers – and expect more from those relationships. Technology and AI will play an increasingly central role, reshaping how advice is delivered, how portfolios are constructed and how firms engage with clients.
Demographic shifts will have profound implications – particularly around retirement solutions and the growing influence of female wealth. We will also see continued growth in ETFs alongside an expanded opportunity set across both public and private markets.
Ultimately, the firms that succeed will be those that offer more than products – so partnership, customisation and value beyond investing. Co creation at scale will not just be possible, it will be expected.
