Capital Group Chairman: "The Greater the Uncertainty, the More Important Long-Term Investment"

Special Lecture at KIC's 20th Anniversary Event
"Impossible to Time the Market... Long-Term Approach Needed"

Mike Gitlin, Chairman of Capital Group USA, is giving a special lecture at the Korea Investment Corporation's 20th anniversary event held on the 1st in Jung-gu, Seoul.

The head of Capital Group, one of the world's top three asset management firms alongside Fidelity and Vanguard, has emphasized the importance of long-term investment. His core belief is that the principles of diversification and long-term investment must be upheld, especially in times of heightened uncertainty.

On July 1, Mike Gitlin, Chairman of Capital Group, delivered a special lecture at the 20th anniversary event of Korea Investment Corporation held in Jung-gu, Seoul, where he made these assertions. Gitlin explained, "As we enter an era of geopolitical realignment, uncertainty has increased, but at the same time, high market volatility can also present opportunities. Changes in geopolitics and trade will have different impacts on each company and country, but companies with strong management teams and differentiated products and services will achieve long-term success."

The point he particularly emphasized was the 'long-term' perspective. He stressed that long-term investment is essential for consistent success, arguing that timing the market is nearly impossible. Gitlin stated, "When the United States announced its tariff policy, the S&P 500 index fell by 19% in just seven weeks, and then rose by 19% again in the following seven weeks. It is virtually impossible to respond to such a market through trading. Instead of succumbing to fear, it is important to see opportunities and adopt a long-term perspective of five or ten years?this is why long-term investment matters."

He also described various market trends. First, he pointed to aging populations. As intergenerational wealth transfer accelerates, over $100 trillion in assets will change hands by 2045, presenting long-term, time-series opportunities. The growth and democratization of the private equity market were also cited as major changes. Gitlin diagnosed, "Whereas the private market was once dominated by institutional investors, individual investors' assets are now entering the space. In addition, the share of active ETFs in the ETF market, which was previously limited to passive strategies, is expected to grow to 30%." He explained that all these trends highlight the value of active management and the importance of moving beyond benchmarks.

He also presented the philosophy that, over the long term, active managers contribute to building a healthy and robust financial market. Thorough fundamental analysis, communication with management, and downside risk protection were all cited as key elements. Gitlin further emphasized that Capital Group, founded in 1931, is particularly strong in defending against downside risks.

Gitlin stated, "While implementing our asset diversification strategy, 87% of Capital Group's results have exceeded benchmark returns, and even after deducting fees, this ratio remains above 80%. When calculating incentives, the most important metric for us is not the one-year return, but the eight-year cumulative return. This shows how much we value long-term performance."

Kim Yong, former President of the World Bank, is giving a special lecture at the Korea Investment Corporation's 20th anniversary event held on the 1st in Jung-gu, Seoul.

Meanwhile, at the same event, Kim Yong, former President of the World Bank, also delivered a special lecture on the theme of "Infrastructure Investment for a Sustainable Future." He emphasized that when sovereign wealth funds invest in emerging markets, they can contribute to the global economy and improve people's well-being. Kim explained, "During Korea's process of escaping poverty, there was support from the World Bank, including loans. If investments had not been made to combat AIDS in African countries such as Ethiopia and Haiti, the economies of the Sub-Saharan region would have collapsed."