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About Newton

  • Australian investors are under increased regulatory pressure to achieve their investment goals and to meet net-zero commitments. At Newton, in collaboration with local distribution specialists from our parent company BNY Mellon Investment Management, we work in partnership with our clients to generate a deep understanding of the challenges they face, and we strive to deliver strong outcomes to help achieve their investment goals.

Strategy highlights

  • Actively managed, absolute-return investment approach, with an emphasis on capital preservation
  • A focus on security selection, asset class flexibility and simple hedging strategies – to manage risk and offer investors the potential to enjoy attractive long-term total returns
  • Flexible, transparent, single portfolio of predominantly direct and liquid investments

Our philosophy and process

  • The Real Return strategy has a simple structure, with a stable core of predominantly traditional return-seeking assets, and a layer of risk-offsetting positions which aim to dampen volatility and preserve capital.
    Material ESG (environmental, social and governance) risks, opportunities and issues are considered as part of the investment research process.
  • The strategy is conviction-based, with no regional, sector or performance reference constraints. A constantly evolving and forward-looking approach seeks to anticipate change, manage risk, and identify opportunities.

Every time we consider a security or look at an industry or country, it’s in the context of what’s happening across the world. We believe the investment landscape is shaped over the long term by some key trends, and we use a range of global investment themes to capture these.

Investment team

Our Real Return strategy is managed by an experienced team with a wide range of backgrounds. Our investment team of research analysts and portfolio managers works together across regions and sectors, helping to ensure that our investment process is highly flexible. Guided by our global investment themes, we seek to identify opportunities and risks through research and debate.

20
years’ average investment experience
14
years’ average time at Newton

Strategy profile

Objective:

The strategy aims to deliver a total return of SONIA (30-day compounded) +4% per annum over 5 years before fees. In doing so, the strategy aims to achieve a positive return on a rolling 3-year basis. However, a positive return is not guaranteed and a capital loss may occur.

Performance benchmark:

SONIA (30-day compounded) +4%

* Please note that on 1 October 2021, the performance benchmark for this strategy changed from 1-month GBP LIBOR +4% to SONIA (30-day compounded) +4%.

Volatility:

Expected to be between that of bonds and equities over the long term

Strategy size:

A$21.9bn (as at 30 June 2022), including GBP, EUR, USD and AUD strategies

Strategy inception:

Composite inception: 1 April 2004

Typical assets

Selective exposure to
  • Equities
  • Corporate bonds
  • Government bonds
  • Cash derivatives
Other assets via tradeable securities
  • Real estate
  • Commodities
  • Currencies
  • Infrastructure
  • Renewable energy
  • Other ‘alternative’ strategies

Your capital may be at risk. The value of investments and the income from them can fall as well as rise and investors may not get back the original amount invested.

ESG analysis may vary depending on the type of security, investment rationale and investment strategy. Newton does not currently view certain types of investments as presenting ESG risks, opportunities and/or issues, and believes it is not practicable to evaluate such risks, opportunities and/or issues for certain other investments. In addition, Newton will make investment decisions that are not based solely on ESG considerations. In some cases, therefore, Newton may conclude that other attributes of an investment outweigh ESG considerations when making investment decisions.

Key investment risks

  • Performance aim risk: The performance aim is not a guarantee, may not be achieved and a capital loss may occur. Strategies which have a higher performance aim generally take more risk to achieve this and so have a greater potential for returns to vary significantly.
  • Currency risk: This strategy invests in international markets which means it is exposed to changes in currency rates which could affect the value of the strategy.
  • Derivatives risk: Derivatives are highly sensitive to changes in the value of the asset from which their value is derived. A small movement in the value of the underlying asset can cause a large movement in the value of the derivative. This can increase the sizes of losses and gains, causing the value of your investment to fluctuate. When using derivatives, the strategy can lose significantly more than the amount it has invested in derivatives.
  • Changes in interest rates & inflation risk: Investments in bonds/money market securities are affected by interest rates and inflation trends which may negatively affect the value of the strategy.
  • Credit ratings and unrated securities risk: Bonds with a low credit rating or unrated bonds have a greater risk of default. These investments may negatively affect the value of the strategy.
  • Credit risk: The issuer of a security held by the strategy may not pay income or repay capital to the strategy when due.
  • Emerging markets risk: Emerging Markets have additional risks due to less-developed market practices.
  • Liquidity risk: The strategy may not always find another party willing to purchase an asset that the strategy wants to sell which could impact the strategy’s ability to sell the asset or to sell the asset at its current value.
  • Shanghai-Hong Kong Stock Connect and/or the Shenzhen-Hong Kong Stock Connect (‘Stock Connect’) risk: The strategy may invest in China A shares through Stock Connect programmes. These may be subject to regulatory changes and quota limitations. An operational constraint such as a suspension in trading could negatively affect the strategy’s ability to achieve its investment objective.
  • CoCos risk: Contingent convertible securities (CoCos) convert from debt to equity when the issuer’s capital drops below a pre-defined level. This may result in the security converting into equities at a discounted share price, the value of the security being written down, temporarily or permanently, and/or coupon payments ceasing or being deferred.
  • Counterparty risk: The insolvency of any institutions providing services such as custody of assets or acting as a counterparty to derivatives or other contractual arrangements, may expose the strategy to financial loss.
  • Investment in infrastructure companies risk: The value of investments in Infrastructure Companies may be negatively impacted by changes in the regulatory, economic or political environment in which they operate.

Strategy highlights

  • Embedding environmental, social and governance (ESG) analysis to look beyond the financial statements
  • Investing in issuers that positively manage the material impacts of their operations and products on the environment and society, while actively omitting those involved in areas of high social cost, environmental degradation or violators of the UN Global Compact Principles
  • Seeks to achieve its objective with reduced volatility through security selection, asset-type flexibility and an emphasis on capital preservation

Our philosophy and process

Harnessing Newton’s global analysis resources, the strategy adheres to our investment framework focused on fundamentals, themes, valuations and ESG considerations.

We focus on innovative companies and dynamic management teams that provide solutions and benefit from growth opportunities. Active corporate engagement and proxy voting provide powerful feedback loops that make us more informed shareholders who promote positive corporate development.

The strategy is conviction-based, with no regional, sector or performance reference constraints. It has a simple structure, with a stable core of predominantly traditional return-seeking assets, and a layer of risk-offsetting positions which aim to dampen volatility and preserve capital.

Sustainable ‘red lines’, with responsible investment team validation, seek to ensure there is no investment in security issuers that:

  • Breach the UN Global Compact
  • Are incompatible with a 2˚C world
  • Are deemed to have material ESG risks which are likely to negatively affect future performance and are associated with significant social or environmental harm

The strategy seeks to avoid investing in companies that participate in specific areas of activity that we deem to be harmful from an environmental and/or social perspective.

Every time we consider a security or look at an industry or country, it’s in the context of what’s happening across the world. We believe the investment landscape is shaped over the long term by some key trends, and we use a range of global investment themes to capture these.

Investment team

Our Sustainable Real Return strategy is managed by an experienced team with a wide range of backgrounds. Our investment team of research analysts and portfolio managers works together across regions and sectors, helping to ensure that our investment process is highly flexible. Guided by our global investment themes, we seek to identify opportunities and risks through research and debate.

20
years’ average investment experience
14
years’ average time at Newton

Strategy profile

Objective

The strategy seeks to deliver a total return of SONIA (30-day compounded) +4% per annum over rolling 5-year periods, from a globally diversified portfolio of securities that demonstrate attractive investment attributes and sustainable business practices. In doing so, the strategy aims to achieve a positive return on a rolling 3-year basis. However, a positive return is not guaranteed and a capital loss may occur.

Performance benchmark

SONIA (30-day compounded) +4%

Volatility

Expected to be between that of bonds and equities over the long term

Strategy size

A$1.1bn (as at 30 June 2022)

Strategy inception

Composite inception: 1 May 2018


*Please note that on 1 October 2021, the performance benchmark for this strategy changed from 1-month GBP LIBOR +4% to SONIA (30-day compounded) +4%.

Your capital may be at risk. The value of investments and the income from them can fall as well as rise and investors may not get back the original amount invested.

Newton will make investment decisions that are not based solely on ESG considerations. Other attributes of an investment may outweigh ESG considerations when making investment decisions. The way that ESG considerations are assessed and the assessment of their suitability for Newton’s sustainable strategies may vary depending on the asset class and strategy involved. For Newton’s sustainable strategies, ESG Quality Reviews are performed prior to investment for corporate investments (single name equity and fixed income securities).

Key investment risks

  • Performance aim risk: The performance aim is not a guarantee, may not be achieved and a capital loss may occur. Strategies which have a higher performance aim generally take more risk to achieve this and so have a greater potential for returns to vary significantly.
  • Currency risk: This strategy invests in international markets which means it is exposed to changes in currency rates which could affect the value of the strategy.
  • Derivatives risk: Derivatives are highly sensitive to changes in the value of the asset from which their value is derived. A small movement in the value of the underlying asset can cause a large movement in the value of the derivative. This can increase the sizes of losses and gains, causing the value of your investment to fluctuate. When using derivatives, the strategy can lose significantly more than the amount it has invested in derivatives.
  • Changes in interest rates & inflation risk: Investments in bonds/money market securities are affected by interest rates and inflation trends which may negatively affect the value of the strategy.
  • Credit ratings and unrated securities risk: Bonds with a low credit rating or unrated bonds have a greater risk of default. These investments may negatively affect the value of the strategy.
  • Credit risk: The issuer of a security held by the strategy may not pay income or repay capital to the strategy when due.
  • Emerging markets risk: Emerging Markets have additional risks due to less-developed market practices.
  • Shanghai-Hong Kong Stock Connect and/or the Shenzhen-Hong Kong Stock Connect (‘Stock Connect’) risk: The strategy may invest in China A shares through Stock Connect programmes. These may be subject to regulatory changes and quota limitations. An operational constraint such as a suspension in trading could negatively affect the strategy’s ability to achieve its investment objective.
  • CoCos risk: Contingent convertible securities (CoCos) convert from debt to equity when the issuer’s capital drops below a pre-defined level. This may result in the security converting into equities at a discounted share price, the value of the security being written down, temporarily or permanently, and/or coupon payments ceasing or being deferred.
  • Sustainable strategies risk: The strategy follows a sustainable investment approach, which may cause it to perform differently than strategies that have a similar objective but which do not integrate sustainable investment criteria when selecting securities. The strategy will not engage in stock lending activities and, therefore, may forego any additional returns that may be produced through such activities.
  • Investment in infrastructure companies risk: The value of investments in infrastructure companies may be negatively impacted by changes in the regulatory, economic or political environment in which they operate.
  • Counterparty risk: The insolvency of any institutions providing services such as custody of assets or acting as a counterparty to derivatives or other contractual arrangements, may expose the strategy to financial loss.

Strategy highlights

  • Bond asset-class exposure managed dynamically and driven by market opportunities and risks, unconstrained by an index
  • The flexibility to use stabilising assets and hedging positions to provide downside protection and preserve capital
  • Investing globally to provide diversification and take advantage of the divergence between the prospects of different countries

Our philosophy and process

  • Every time we consider a security or look at an industry or country, it’s in the context of what’s happening across the world. We believe the investment landscape is shaped over the long term by some key trends, and we use a range of global investment themes to capture these.

Investment team

Our Global Dynamic Bond strategy is managed by a focused, experienced fixed-income team. Our investment team of research analysts and portfolio managers works together across regions and sectors, helping to ensure that our investment process is highly flexible. Guided by our global investment themes, we seek to identify opportunities and risks through research and debate.

21
years’ average investment experience
14
years’ average time at Newton

Strategy profile

Objective

The strategy seeks to deliver a total return of SONIA (30-day compounded) +2% per annum over rolling 5-year periods, from a globally diversified portfolio comprised of multiple fixed-income asset classes. In doing so, it aims to achieve a positive return on a rolling 3-year basis. However, a positive return is not guaranteed and a capital loss may occur.

Performance benchmark

SONIA (30-day compounded) +2%

Strategy size

A$4.5bn (as at 30 June 2022), including GBP, EUR, USD and AUD strategies

Strategy inception

1 May 2006


Your capital may be at risk. The value of investments and the income from them can fall as well as rise and investors may not get back the original amount invested.

Newton will make investment decisions that are not based solely on ESG considerations. Other attributes of an investment may outweigh ESG considerations when making investment decisions. The way that ESG considerations are assessed may vary depending on the asset class and strategy involved. The research team performs ESG Quality Reviews on equity securities prior to their addition to Newton’s Research Recommended List (RRL). ESG Quality Reviews are not performed for all fixed income securities. The portfolio managers may purchase equity securities that are not included on the RRL and which do not have ESG Quality Reviews. Not all securities held by Newton’s strategies have an ESG Quality Review completed prior to investment, although since 2020 it has been a requirement for all (single name) equity securities to have an ESG Quality Review before they are purchased for the first time.

Key investment risks

  • Performance aim risk: The performance aim is not a guarantee, may not be achieved and a capital loss may occur. Strategies which have a higher performance aim generally take more risk to achieve this and so have a greater potential for returns to vary significantly.
  • Currency risk: This strategy invests in international markets which means it is exposed to changes in currency rates which could affect the value of the strategy.
  • Derivatives risk: Derivatives are highly sensitive to changes in the value of the asset from which their value is derived. A small movement in the value of the underlying asset can cause a large movement in the value of the derivative. This can increase the sizes of losses and gains, causing the value of your investment to fluctuate. When using derivatives, the strategy can lose significantly more than the amount it has invested in derivatives.
  • Changes in interest rates & inflation risk: Investments in bonds/money market securities are affected by interest rates and inflation trends which may negatively affect the value of the strategy.
  • Credit ratings and unrated securities risk: Bonds with a low credit rating or unrated bonds have a greater risk of default. These investments may negatively affect the value of the strategy.
  • Credit risk: The issuer of a security held by the strategy may not pay income or repay capital to the strategy when due.
  • Emerging markets risk: Emerging Markets have additional risks due to less-developed market practices.
  • CoCos risk: Contingent convertible securities (CoCos) convert from debt to equity when the issuer’s capital drops below a pre-defined level. This may result in the security converting into equities at a discounted share price, the value of the security being written down, temporarily or permanently, and/or coupon payments ceasing or being deferred.
  • Counterparty risk: The insolvency of any institutions providing services such as custody of assets or acting as a counterparty to derivatives or other contractual arrangements, may expose the strategy to financial loss.

Strategy highlights

  • Embedding environmental, social and governance (ESG) analysis to look beyond the financial statements
  • Investing in sustainable sovereign bonds, and bonds of companies that positively manage the material impacts of their operations and products on the environment and society
  • Global investment universe, with the flexibility to use stabilising assets and hedging positions to provide downside protection

Our philosophy and process

Harnessing Newton’s global analysis resources, the strategy adheres to our investment framework focused on fundamentals, themes, valuations and ESG considerations.

Our fixed-income team aims to identify positive ESG behaviour in issuers within a broad investment universe. Our focus is on companies (or sovereigns) that are run for the long term, seeking to effectively balance the interests of all stakeholders and actively managing the material risks for their industry (or economy) in order to deliver more resilient returns for investors.

Sustainable ‘red lines’, with responsible investment team validation, seek to ensure there is no investment in security issuers that:

  • Breach the UN Global Compact
  • Are incompatible with a 2˚C world
  • Are deemed to have material ESG risks which are likely to negatively affect future performance and are associated with significant social or environmental harm

The strategy seeks to avoid investing in companies that participate in specific areas of activity that we deem to be harmful from an environmental and/or social perspective.

The strategy follows an unconstrained, highly dynamic asset-allocation approach within a broad universe of global bonds; it can invest in government bonds, emerging-market sovereigns, high-yield bonds and investment-grade corporate debt. The strategy has the flexibility to manage currency exposure actively to generate additional returns.

Every time we consider a security or look at an industry or country, it’s in the context of what’s happening across the world. We believe the investment landscape is shaped over the long term by some key trends, and we use a range of global investment themes to capture these.

Investment team

Our Sustainable Global Dynamic Bond strategy is managed by a focused, experienced fixed-income team. Our investment team of research analysts and portfolio managers works together across regions and sectors, helping to ensure that our investment process is highly flexible. Guided by our global investment themes, we seek to identify opportunities and risks through research and debate.

21
years’ average investment experience
14
years’ average time at Newton

Strategy profile

Objective

The strategy seeks to deliver a total return of SONIA (30-day compounded) +2% per annum over rolling 5-year periods, from a globally diversified portfolio of debt and debt-related securities issued by companies and governments that demonstrate attractive investment attributes and are deemed to be sustainable. In doing so, it aims to achieve a positive return on a rolling 3-year basis. However, a positive return is not guaranteed and a capital loss may occur.

Performance benchmark

SONIA (30-day compounded) +2%

Strategy size

A$1.0bn (as at 30 June 2022)

Strategy inception

Composite inception: 1 March 2019


Your capital may be at risk. The value of investments and the income from them can fall as well as rise and investors may not get back the original amount invested.

Newton will make investment decisions that are not based solely on ESG considerations. Other attributes of an investment may outweigh ESG considerations when making investment decisions. The way that ESG considerations are assessed and the assessment of their suitability for NIM’s sustainable strategies may vary depending on the asset class and strategy involved. For Newton’s sustainable strategies, ESG Quality Reviews are performed prior to investment for corporate investments (single name equity and fixed income securities).

Key investment risks

  • Objective/performance risk: There is no guarantee that the strategy will achieve its objectives.
  • Performance aim risk: The performance aim is not a guarantee, may not be achieved and a capital loss may occur. Strategies which have a higher performance aim generally take more risk to achieve this and so have a greater potential for returns to vary significantly.
  • Currency risk: This strategy invests in international markets which means it is exposed to changes in currency rates which could affect the value of the strategy.
  • Derivatives risk: Derivatives are highly sensitive to changes in the value of the asset from which their value is derived. A small movement in the value of the underlying asset can cause a large movement in the value of the derivative. This can increase the sizes of losses and gains, causing the value of your investment to fluctuate. When using derivatives, the strategy can lose significantly more than the amount it has invested in derivatives.
  • Changes in interest rates & inflation risk: Investments in bonds/money market securities are affected by interest rates and inflation trends which may negatively affect the value of the strategy.
  • Credit ratings and unrated securities risk: Bonds with a low credit rating or unrated bonds have a greater risk of default. These investments may negatively affect the value of the strategy.
  • Credit risk: The issuer of a security held by the strategy may not pay income or repay capital to the strategy when due.
  • Emerging markets risk: Emerging Markets have additional risks due to less-developed market practices.
  • CoCos risk: Contingent convertible securities (CoCos) convert from debt to equity when the issuer’s capital drops below a pre-defined level. This may result in the security converting into equities at a discounted share price, the value of the security being written down, temporarily or permanently, and/or coupon payments ceasing or being deferred.
  • Sustainable strategies risk: The strategy follows a sustainable investment approach, which may cause it to perform differently than strategies that have a similar objective but which do not integrate sustainable investment criteria when selecting securities. The strategy will not engage in stock lending activities and, therefore, may forego any additional returns that may be produced through such activities.
  • Counterparty risk: The insolvency of any institutions providing services such as custody of assets or acting as a counterparty to derivatives or other contractual arrangements, may expose the strategy to financial loss.

Your capital may be at risk. The value of investments and the income from them can fall as well as rise and investors may not get back the original amount invested.