Our philosophy and process

  • The Fund has a policy of no direct investment in companies which derive more than 10% turnover from tobacco.
  • Environmental, social and governance (ESG) considerations are integrated throughout the research process and via proprietary quality reviews, to ensure that any material issues are captured.

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.

Investment team

The Newton Growth and Income Fund for Charities is managed by an experienced team. Our global sector analysts and investment managers are located on a single floor in London, which helps to ensure that the investment process is flexible and opportunistic. Guided by our global investment themes, the team works together to identify opportunities and risks through research and debate.

25
years' average investment experience

Transcript

Performance commentary
So the Fund had a good quarter in the third quarter of the year, strongly outperforming its benchmark, largely driven by our holdings in equities – some of our health-care holdings such as Abbott Laboratories and Novartis did particularly well in the period; some of our technology holdings – Microsoft – continued to do well, and our holding in the media sector – Wolters Kluwer – also continued to perform well for the Fund, so they were the major performance contributors. Some of the stocks we had did detract a little from performance, so some of our semiconductor holdings were weak – Infineon and Applied Materials – as investors started to worry that the semiconductor cycle had started to roll over a little bit, but overall the Fund had a very strong quarter. In terms of income, pleased to say that the Fund generated a slightly increased level of income on an annual basis, when we look at the first three quarters of this year relative to the same period last year, so from an income point of view also producing a good result.

Activity review
It was relatively quiet period for portfolio movements and transactions over the summer months; we did add two new stocks to the portfolio. There had been a little bit of weakness coming through in the results for both BBA Aviation and Informa, which is a global exhibitions company. We believe that those weaker short-term results mask what we think are strong, longer-term businesses, and so we added those two stocks into the portfolio. We did take some profits on some of our more strongly performing stocks over the period, the ones that I mentioned and had contributed to the strong performance, but overall we ended the period with our equity weightings a little bit lower and our cash weightings a little bit higher than when we started the period.

Investment strategy and outlook

So in terms of outlook, the third quarter saw the 10th anniversary of the Lehman’s bankruptcy, and what we saw in the period post the Lehman’s bankruptcy was globally coordinated action to stabilise the financial system. What we’re seeing now is countries increasingly acting in their own self-interest, which is a very different response to the response that we’ve seen over the past decade. Now whilst we continue to see a number of disruptive and structural changes that are going on in the global economy – largely driven by technological change, the outlook for global growth, for relative currency valuations, and for the returns that we’re going to see from financial markets, are increasingly dependent now on how countries interact with each other and how they trade with each other, and so the outcome of the Brexit negotiations and the tug of war in terms of the trade deal between the US and China are likely to be key really now, I think, in determining the kind of financial returns that we see from markets, certainly over the short term.

Strategy profile

Objective

To maximise returns through capital growth and income. To deliver a minimum target income yield of 3% per annum. This income yield is a target and is not guaranteed.

Literature

Application form
Prospectus
Annual report
Sterling Accumulation KIID
Sterling Income KIID
X Accumulation KIID
X Income KIID
Char Growth and Income Fund for Charities factsheet

Factsheet

Facts and commentary for the past quarter's fund and market performance.


Char Growth and Income Fund for Charities brochure

Brochure

More detail on the strategy's investment approach.

Performance

 

Sep 2013 to
Sep 2014
Sep 2014 to
Sep 2015
Sep 2015 to
Sep 2016
Sep 2016 to
Sep 2017
Sep 2017 to
Sep 2018
Fund return12.23.723.85.812.0
Comparative
index
7.41.018.99.16.8

 

Simulated performance results have certain inherent limitations. Simulated results do not represent actual trading/returns and are not a reliable indicator of future performance.

Source: Newton, Lipper as at 30 September 2018, Sterling Income share class (ISIN: GB00BH3H2883). Fund performance calculated as total return including reinvested income net of UK tax and charges, based on net asset value. All figures are in GBP terms. The impact of an initial charge (currently not applied) can be material on the performance of your investment. Further information is available upon request. The Fund’s comparative index is a composite index consisting of 20% FTSE Government All Stocks (comprised of sterling-denominated UK government bonds), 50% FTSE All-Share (a market-capitalisation weighted index representing the performance of all eligible companies listed on the London Stock Exchange’s main market), 25% FTSE World ex UK index (comprised of large and mid-cap stocks in both developed and emerging markets excluding the UK), and 5% GBP 7-day London Interbank Bid Rate (the average interest rate at which major London banks bid to borrow for a seven-day period from other banks). The Fund does not aim to replicate either the composition or the performance of the comparative index.

The Newton Growth and Income Fund for Charities past performance up until 9 May 2014 is simulated performance based on the actual past performance of the GBP Income share class of the Global Growth & Income Fund for Charities (‘GGIF’), a common investment fund with substantially the same investment objectives, policies and strategies as the Non-UCITS Retail Scheme (NURS): Newton Growth and Income Fund for Charities. Newton Investment Management Limited, the investment manager of the Newton Growth and Income Fund for Charities, was also the investment manager of the GGIF. The GGIF was closed for winding up on 9 May 2014, and the majority of unit holders representing 99% of the GGIF’s assets under management were transferred to the Newton Growth and Income Fund for Charities at its launch on 9 May 2014.

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. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Newton is not a tax expert and independent tax advice should be sought. You should read the Prospectus and the Key Investor Information Document (KIID) for each fund in which you want to invest. The Prospectus and KIID can be found on this page.

Key investment risks

 

  • Objective/performance risk: There is no guarantee that the Fund will achieve its objectives.
  • Currency risk: This Fund invests in international markets which means it is exposed to changes in currency rates which could affect the value of the Fund.
  • 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 Fund 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 Fund.
  • Credit risk: The issuer of a security held by the Fund may not pay income or repay capital to the Fund when due.
  • Charges to capital: The Fund takes its charges from the capital of the Fund. Investors should be aware that this has the effect of lowering the capital value of your investment and limiting the potential for future capital growth. On redemption, you may not receive back the full amount you initially invested.
  • 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 Fund to financial loss