Philosophy and process

Security selection is guided by our investment themes, which help us formulate our views about long-term trends across the investment landscape. The themes help us to distinguish between short-term noise and meaningful drivers of change.

Population dynamics

Populations are shifting significantly, with unprecedented ageing in mature economies and income growth driving changes in developing economies. This leads to differences in growth and fiscal burdens. ‘Population dynamics’ explores what shifts in demography mean for investors.

Financialisation

Cheap money has caused rapid growth in a sector already supported by deregulation. ‘Financialisation’ investigates the implications of finance dominating economic activity, instead of serving it.

Earth matters

Environmental factors are high up the political agenda and provide areas of opportunity as well as risk. Governments are under pressure to respond but this can be expensive, despite advancements in technology. ‘Earth matters’ looks at these issues.

Smart revolution

Machines and networks are becoming more intelligent. This is disrupting the labour market, as machines increasingly replace humans in the workplace. ‘Smart revolution’ considers the implications commercially, socially and politically.

Net effects

The world has made the transition from connecting places to connecting people to connecting devices. The rapid rise in the ‘internet of things’ is transforming lifestyles and business. This creates winners and losers – our ‘net effects’ theme seeks to identify them.

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.

Healthy demand

The industry for health-care products and services is growing rapidly. Ageing populations are fuelling demand in developed economies, and increasing incomes and changing lifestyles are creating new markets in emerging economies. ‘Healthy demand’ looks at the opportunities and the risks.

China influence

The influence of China on the world has grown exponentially but its economy looks increasingly risky. ‘China influence’ looks at how the country’s development affects the investment outlook beyond its borders.1

1 Compared to more established economies, the value of investments in emerging markets may be subject to greater volatility owing to differences in generally accepted accounting principles or from economic or political instability or less developed market practices.

Consumer power

Technological advances are increasingly shifting the power to consumers in the marketplace. With the ability to compare prices and products independently now in the hands of the consumer, businesses must adapt to a changing commerce landscape, as their customers seek out better experiences, authenticity and value. Our ‘consumer power’ theme addresses these trends.

The Fund has four areas of focus

  • The Fund does not invest in security issuers that:
     – Breach the UN Global Compact
     – Are incompatible with a 2-degree world
     – Derive more than 10% of turnover from tobacco production and sale
     – Are deemed to have material and unresolvable environmental, social and governance (ESG) issues

Investment team

The Newton Sustainable Growth and Income Fund for Charities is managed by a highly experienced team. Our global sector analysts and investment managers work as part of a single investment team, which promotes perspective on the investment landscape, strong idea generation and the swift implementation of investment ideas. Our dedicated responsible investment team is an integral part of the investment decision-making process. Guided by our global investment themes, the team works together to identify opportunities and risks through research and debate.

Strategy profile

Objective

To generate capital growth and income over the long term (5 years or more).

The Fund will measure its performance against a composite index, comprising 75% MSCI AC World NR Index, 20% FTSE Actuaries UK Conventional Gilts All Stocks TR Index and 5% LIBID GBP 7 Day, as a comparator benchmark (the ‘Benchmark’). The Fund will use the Benchmark as an appropriate comparator because it includes a broad representation of the asset classes, sectors and geographical areas in which the Fund predominantly invests. The Fund is actively managed, which means the Investment Manager has absolute discretion to invest outside the Benchmark subject to the investment objective and policies disclosed in the Prospectus. While the Fund’s holdings may include constituents of the Benchmark, the selection of investments and their weightings in the portfolio are not influenced by the Benchmark. The investment strategy does not restrict the extent to which the Investment Manager may deviate from the Benchmark.

Literature

Application form
Prospectus
Sterling Accumulation KIID
Sterling Income KIID
X Income KIID
Sustainable Growth and Income Fund for Charities brochure

Brochure

More detail on the strategy's investment approach.

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.

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.
  • Sustainable risk: The Fund follows a sustainable investment approach, which may cause it to perform differently to strategies that have similar objectives but which do not integrate sustainable investment criteria when selecting securities.