Strategy highlights

  • Aims to deliver an attractive total return over the long term, pursuing an asymmetric return profile (low downside market capture)
  • Disciplined approach seeks to ensure that every stock and the overall portfolio compounds at a higher yield than that of the market, and that dividends are underpinned by sustainable cash-flow streams
  • A global investment universe offers investors an opportunity to diversify their equity-income investments. Active stock selection is guided by our investment themes, fundamentals and valuation

Our philosophy and process

Investment team

Our Global Equity Income strategy is managed by an experienced team. In-house research analysts are at the core of our investment process, and our multidimensional research platform spans fundamental, thematic, ESG, quantitative, geopolitical, investigative and private-market research to promote better-informed investment decisions.

27
years’ average investment experience
24
years’ average time at Newton

Strategy profile

Objective

The strategy seeks to outperform the FTSE World Index by more than 2% per annum over rolling 5-year periods on a total-return basis, by achieving income and capital growth from a global portfolio comprised of companies that typically yield at least 25% greater than the FTSE World Index yield.

Performance benchmark

FTSE World Index


Typical number of equity holdings:

40 to 70


Yield discipline:

Every new holding in a global equity income portfolio typically has a prospective yield 25% greater than the benchmark at the point of purchase. Any holding whose prospective yield falls below the benchmark yield will trigger our sale discipline process.

<strong>Strategy size:</strong>

A$6.8bn (as at 30 Sept 2022)

Strategy inception:

1 January 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

  • Objective/performance risk: There is no guarantee that the strategy will achieve its objectives.
  • 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.
  • Emerging markets risk: Emerging Markets have additional risks due to less-developed market practices.
  • Concentration risk: A fall in the value of a single investment may have a significant impact on the value of the strategy because it typically invests in a limited number of investments.
  • 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.
  • High yield companies risk: Companies with high-dividend rates are at a greater risk of being able to meet these payments and are more sensitive to interest rate risk.
  • 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.