Our philosophy and process
- 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.
- A constantly evolving and forward-looking approach seeks to anticipate change, manage risk, and identify opportunities. ESG considerations are integrated throughout the research process and via proprietary quality reviews, to ensure that any material issues are captured.
State intervention
Authorities have engaged in ever-greater policy intervention and regulation to shore up economic growth. We believe ‘state intervention’ has increased misallocation of capital, caused volatility in markets and inflated asset prices – and we think that calls for a stock-specific approach.
Financialization
Cheap money has caused rapid growth in a sector already supported by deregulation. ‘Financialization’ investigates the implications of finance dominating economic activity, instead of serving it.
Transcript
In the years ahead, we anticipate marked divergence in the fortunes of regions, currencies and bond instruments.
So what should investors do?
A dynamic, unconstrained approach to bond investing could help maximize opportunities while trying to minimize risks.
One solution could be our Global Dynamic Bond strategy.
It uses a mixture of global fixed-income markets and some hedging techniques to achieve its absolute-return objective.
And it invests in a range of bond and currency markets to try to exploit divergence. So how does it work?
The strategy has a transparent, single portfolio of direct investments. The emphasis is on traditional fixed-income asset classes for simplicity and liquidity.
There are four key asset classes: government bonds, investment-grade corporate bonds, emerging- market sovereigns and high-yield corporate bonds.
They are selected based on what we see as their strong fundamentals, and are guided by the perspective of our global investment themes.
We balance the allocation to try and suit the economic cycle – whether that’s rising interest rates, defaults, devaluation or inflation.
Then we seek to dampen volatility and preserve capital by hedging interest rate and currency exposure. We invest in a range of markets including inflation-linked bonds, active currency positions and short-dated high-yield bonds.
Key to the strategy is flexibility, dynamic security and asset allocation.
We believe that’s vital in order to take advantage of the changing fortunes of bond and currency markets.
The Global Dynamic Bond strategy aims to capture market upside and preserve capital, in order to deliver long-term results for our clients.
Investment team
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.
- 20
- years’ average investment experience
- 13
- years’ average time at Newton
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Paul Brain
Investment leader, fixed income
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Jon Day
Portfolio manager, fixed income
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Parmeshwar Chadha
Portfolio manager, fixed income
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Howard Cunningham
Portfolio manager, fixed income
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Carl Shepherd
Portfolio manager, fixed income
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Trevor Holder
Portfolio manager, fixed income
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Scott Freedman
Analyst and portfolio manager, fixed income
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Martin Chambers
Credit analyst, fixed income
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Ashwin Palta
Credit research analyst, fixed income
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Jeevan Dhoot
Credit analyst, fixed income
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Catherine Doyle
Investment specialist
Strategy profile
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Objective
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To maximize the total return from a globally diversified portfolio, predominantly comprising high-yielding corporate and government fixed-interest securities
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Performance aim
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Aims to deliver a minimum return of cash (one-month U.S.-dollar LIBOR) +2% 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.
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Strategy size
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C$5.9bn (as at Dec 31, 2020), including GBP, EUR, USD and AUD strategies
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Strategy inception
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September 1, 2010
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.