Sustainable Global Emerging Markets

Strategy highlights

: Fundamental bottom-up research
Long-term thematic research targets areas with strong growth potential, not ‘old’ profit pools
Focus on ‘compounders’ – exceptional, leading businesses with long-term growth potential

Our philosophy and process

: Harnessing Newton’s global analyst resources, and adhering to our investment framework focused on fundamentals, themes, valuations and ESG considerations.

Three overarching themes aligned with UN Sustainable Development Goals – Earth, health and wealth.

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
: Focus on innovative companies and dynamic management teams that provide solutions and benefit from growth 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 themes to help identify opportunities.

Investment team

Our Sustainable Global Emerging Markets 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.

16: years’ average investment experience
07: years’ average time at Newton

Paul Birchenough

Portfolio manager, Global Opportunities team
Alex Khosla

Portfolio manager, Global Opportunities team
Ian Smith

Portfolio manager, Global Opportunities team
Julianne McHugh

Head of Sustainable Equities
Zoe Kan

Portfolio manager, emerging and Asian equity income
Nick Pope

Portfolio manager, sustainable equity strategies
Fei Chen

Portfolio manager, global research
Aditya Shah

Portfolio analyst, Global Opportunities team

Strategy profile

Objective: To achieve long-term capital growth by investing in emerging-market securities that demonstrate attractive investment attributes and are deemed by Newton to be sustainable.
Performance benchmark: MSCI Emerging Markets Index (NDR)
Typical number of equity holdings: Typically 45-65 holdings
Strategy inception: December 2021

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.
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.
Geographic concentration risk: The strategy primarily invests in a single market which may have a significant impact on 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.
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.
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.
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.