Investment approaches
Real return
A flexible and transparent global multi-asset strategy designed to seek absolute returns irrespective of market conditions
-
Actively managed, absolute-return investment approach, with an emphasis on capital preservation
-
A focus on security selection, asset class flexibility and simple hedging strategies – to manage risk and offer investors the potential to enjoy attractive long-term total returns
-
Flexible, transparent, single portfolio of predominantly direct and liquid investments
Our philosophy and process
- The Real Return fund is a conviction-based strategy with no regional, sector or performance reference constraints. It adopts a forward-looking approach that seeks to anticipate change, manage risk, and identify opportunities.
- Its simple structure, with a stable core of predominantly traditional return-seeking assets, and a layer of risk-offsetting positions, aim to dampen volatility and preserve capital.
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.
Transcript
You can imagine the portfolio like this:
At the core, the emphasis is on traditional assets to generate capital growth and drive long-term returns.
Then there is an outer layer – stabilising assets and hedging positions to try to counteract risks and dampen volatility.
And this is how we construct it:
In the core, might be equities, infrastructure and renewables.
In the outer layer we use a diverse range of instruments, including commodities, bonds, simple derivative strategies and currencies.
We alter the proportions of the core and outer layer according to our evolving view on the investment landscape.
We think there’s a key advantage to active management. We can seek out returns in rising markets and try to minimise the downfall in falling markets.
Its composition is guided by the perspective of our global investment themes. They are our interpretation of the forces driving long-term change in the world.
Our Real Return strategy takes a simple, transparent approach to try to deliver, solid, stable returns for our clients.
Investment team
Our Real Return strategy is managed by an experienced team with a wide range of backgrounds. 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.
- 18
- years’ average investment experience
- 12
- years’ average time at Newton
-
Suzanne Hutchins
Portfolio manager, Real Return team
-
Aron Pataki
Co-lead, Real Return team
-
Andy Warwick
Co-lead, Real Return team
-
Philip Shucksmith
Portfolio manager, Real Return team
-
Matt Brown
Portfolio manager, Real Return team
-
Lars Middleton
Portfolio manager, Real Return team
-
Brendan Mulhern
Global strategist, Real Return team
-
Catherine Doyle
Investment specialist
Strategy profile
-
Performance aim
-
The strategy aims to deliver a minimum return of cash (one-month sterling LIBOR) +4% 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.
-
Volatility
-
Expected to be between that of bonds and equities over the long term
-
Strategy size
-
£12.2billion (as at 30 Sept 2020), including GBP, EUR, USD and AUD strategies
-
Strategy inception
-
Composite inception: 1 April 2004
-
Typical assets
-
Selective exposure to
- Equities
- Corporate bonds
- Government bonds
- Cash
- Derivatives
-
Other assets via tradeable securities
- Real estate
- Commodities
- Currencies
- Infrastructure
- Renewable energy
- Other ‘alternative’ strategies
-
Strategy available through pooled UK vehicle
-
BNY Mellon Real Return Fund
View fund performance
View Key Investor Information Document
Strategy factsheet
Performance and commentary for the last quarter.
Responsible investment report
Stewardship activities (voting and engagement) for the last quarter and ESG metrics.
Brochure
More detail on the strategy’s investment approach.
Quarterly video update: Q3 2020
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.