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A fixed-income strategy with a dynamic, absolute-return approach, investing in securities that demonstrate attractive investment attributes and sustainable business practices
Strategy highlights
Environmental, social and governance (ESG) analysis looks 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.
Our sustainable ‘red lines’ are built on a combination of exclusions that effectively avoid investments in security issuers involved in or that generate a material proportion of revenues from areas of activity that we deem to be harmful from a social and/or environmental 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 themes to help identify opportunities.
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 inception
Composite inception: 1 March 2019
Investment team
Our Sustainable Global Dynamic Bond strategy is managed by a focused, experienced fixed-income 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.
Credit analyst & portfolio manager, Fixed Income team
Trevor Holder
Portfolio manager, Fixed Income team
Carl Shepherd
Portfolio manager, Fixed Income team
Howard Cunningham
Portfolio manager, Fixed Income team
Parmeshwar Chadha
Portfolio manager, fixed income
Jon Day
Portfolio manager, Fixed Income team
Ella Hoxha
Head of Fixed Income
Catherine Doyle
Investment specialist
Sinead Prendergast
Credit research analyst, Fixed Income team
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Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!
Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!
Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!
Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!
Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!
Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!
Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!
Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!
Welcome to WordPress. This is your first post. Edit or delete it, then start blogging!
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 and sustainability 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 reviews are performed prior to investment for corporate investments (single name equity and fixed income securities). The analysis will then also follow the Newton sustainable investment process to ensure it fits with the wider Newton sustainable investment philosophy.
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.
Individual Investors will be redirected to bnymellon.com
This is a financial promotion. Issued by Newton Investment Management Limited, The Bank of New York Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England No. 01371973. Newton Investment Management is authorised and regulated by the Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN and is a subsidiary of The Bank of New York Mellon Corporation. Newton is providing financial services to wholesale clients in Australia in reliance on ASIC Class Order 03/1099, a copy of which is on the website of the Australian Securities and Investments Commission, www.asic.gov.au. The Class Order exempts entities that are authorised and regulated in the UK by the FCA, such as Newton, from the need to hold an Australian financial services license under the Corporations Act 2001 for certain financial services provided to Australian wholesale clients on certain conditions. Financial services provided by Newton are regulated by the FCA under the laws and regulatory requirements of the United Kingdom, which are different to the laws applying in Australia.
Material in this publication is for general information only. The opinions expressed in this document are those of Newton and should not be construed as investment advice or recommendations for any purchase or sale of any specific security or commodity. Certain information contained herein is based on outside sources believed to be reliable, but its accuracy is not guaranteed. You should consult your advisor to determine whether any particular investment strategy is appropriate. This material is for institutional investors only. Past performance is not a guide to future performance. 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.
This material is for Australian wholesale clients only and is not intended for distribution to, nor should it be relied upon by, retail clients. This information has not been prepared to take into account the investment objectives, financial objectives or particular needs of any particular person. Before making an investment decision you should carefully consider, with or without the assistance of a financial adviser, whether such an investment strategy is appropriate in light of your particular investment needs, objectives and financial circumstances.
This information is made available by Newton and BNY Mellon Investment Management Australia Ltd (AFSL 227865). This information is confidential and is only provided to Australian wholesale clients (as that term is defined in section 761G of the Corporations Act 2001 (Cth)). This is not an offering or the solicitation of an offer to purchase an interest in any financial product referred to in this website. This content is for general purposes only and should not be relied upon as financial product advice. This content has been prepared without taking into account the objectives, financial situation or needs of any person. Before making an investment decision an investor should consider the appropriateness of the information in this website having regard to these matters and read the disclosure document relating to a financial product. Investors should also consider obtaining independent advice before making any investment decisions. Investments can go up and down and to the extent that this website contains any past performance information, past performance is not a reliable indicator of the future performance of the relevant investment or any similar investment strategy.
Newton Investment Management Limited is exempt from the requirement to hold an Australian financial services licence in respect of the financial services it provides to wholesale clients in Australia and is authorised and regulated by the Financial Conduct Authority of the UK under UK laws, which differ from Australian laws.
