Strategy Highlights

  • An actively managed fixed-income strategy, with flexibility at the asset-allocation level
  • Focus on delivering income sustainably, with monthly distributions
  • Flexibility to manage currency exposure actively to generate additional returns

This strategy is offered by Newton Investment Management Ltd (‘NIM’). NIM is part of the Newton Investment Management Group.

Our Philosophy and Process

The strategy aims to deliver income sustainably by investing opportunistically in a broad universe of bonds – principally government bonds, emerging-market sovereigns, high-yield bonds and investment-grade corporate debt. The strategy will seek to take advantage of the changing economic cycle by altering the weightings of these broad fixed-income asset classes while always maintaining some exposure to higher-yielding assets in pursuit of its income objective.
A constantly evolving and forward-looking approach seeks to anticipate change, manage risk, and identify opportunities. Material ESG risks, opportunities and issues are considered as part of the investment research 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 themes to help identify opportunities.

Investment Team

This 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.

22
years’ average investment experience
15
years’ average time at Newton

Strategy Profile

Objective

The strategy seeks to provide a minimum average annual total return of SOFR (30-day compounded) plus 3%, before fees and expenses, over a five-year period, from a globally diversified portfolio comprised of multiple fixed-income asset classes. However, a positive return is not guaranteed and a capital loss may occur.

<strong>Strategy inception:</strong>

Composite inception: 1 April 2018

US RI report Global Dynamic Bond Income

Reponsible investment report

Stewardship activities (voting and engagement) for the last quarter and ESG metrics.

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. It is one of many inputs into the fundamental analysis. Other attributes of an investment may outweigh ESG considerations when making investment decisions. The way that material ESG considerations are assessed may vary depending on the asset class and strategy involved. As of September 2022, the research team performs ESG analysis on equity securities prior to their addition to Newton’s Research Recommended List (RRL). ESG 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 reviews. Not all securities held by Newton’s strategies have an ESG review completed prior to investment.

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.
  • 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.