Q2 2026 Fund Commentary

Commentary and opinions are provided by Capital Group Companies Inc.

Market commentary

Global equities rebounded during the second quarter of 2026 as strong corporate earnings, gains in semiconductor-related companies and easing geopolitical concerns supported investor sentiment. Technology-oriented companies benefited from continued expectations for investment in artificial intelligence (AI) infrastructure, including data centres and computing capacity, which supported performance across global equity markets.

Emerging markets, particularly Taiwan and South Korea, were among the strongest-performing regions during the quarter, supported by strong earnings from semiconductor-related businesses.

Performance

Company selection in the information technology sector contributed to the Fund’s performance, particularly among semiconductor-related holdings that benefited from strong operating results and continued demand linked to AI infrastructure spending. Company selection in the health care sector also contributed to performance, supported by managed care and health services businesses that reported encouraging earnings and improving fundamentals. Country positioning and security selection in Taiwan and South Korea contributed to performance as semiconductor-related companies in those markets performed well.

Taiwan Semiconductor Manufacturing Co. Ltd. contributed to performance as strong demand for advanced semiconductor manufacturing supported earnings expectations and share price performance. SK Hynix Inc. contributed to performance as investor enthusiasm around AI-related memory chip demand and stronger-than-expected business results supported the company’s shares. Broadcom Inc. contributed to performance after reporting encouraging results and announcing an expansion of its technology relationship with Apple Inc.

Company selection within the financials sector detracted from the Fund’s performance. Company selection within the industrials sector detracted from performance, particularly among aerospace and defence holdings that experienced profit-taking following strong prior performance. Security selection within the consumer discretionary sector and certain resource-related holdings also detracted from performance during the quarter.

Canadian Natural Resources Ltd. detracted from performance as crude oil prices weakened following progress in U.S.-Iran peace negotiations, creating pressure on energy equities. Intercontinental Exchange Inc. detracted from performance and was the largest negative contributor within the financials sector. BAE Systems PLC detracted from performance as aerospace and defence industry holdings broadly experienced profit-taking after a period of strong gains.

Portfolio activity

The sub-advisor increased Apple Inc., Western Digital Corp., Cerebras Systems Inc., FNI and The Home Depot Inc. The sub-advisor reduced Taiwan Semiconductor Manufacturing Co. Ltd., NVIDIA Corp., SK Hynix Inc., Microsoft Corp. and BAE Systems PLC.

Outlook

In the sub-advisor’s view, market volatility may persist. The Fund remains focused on identifying companies with durable competitive advantages and long-term growth prospects across global equity markets. This view is consistent with the Fund’s objective of seeking long-term growth of capital through investments in global equities.

The Fund continues to maintain exposure to innovative technology businesses, including semiconductor-related companies that, in the sub-advisor’s view, could benefit from ongoing investment in AI infrastructure and computing capacity. The Fund remains diversified across sectors and regions while emphasizing bottom-up company selection and long-term investment opportunities.