Blockchain Innovation

This strategy is offered by Newton Investment Management Ltd (‘NIM’). This strategy may be managed by an affiliate of NIM and may apply a research process that differs from that applied by NIM.

Strategy overview

The underlying concept of blockchain technology is the placement of any asset on a digital system, also known as a ledger, to record and validate any transaction type. The technology is an integral part of the broader digital transformation that is underway, which is fundamentally changing the way all businesses are operating and delivering value to customers. Key return drivers of companies that embrace blockchain technology include both revenue growth and cost saving opportunities.

Our global fundamental research platform includes analysts who leverage their extensive expertise across specific industries and geographies to identify companies that align with the opportunities inherent in blockchain. Leveraging that expertise, we assign a proprietary materiality ranking to a company before adding it to our universe.

We then select from this universe, initially targeting 30 to 50 holdings that represent the strongest opportunity to develop significant exposure to blockchain. The fundamental portfolio manager initially determines position sizing.

Strategy profile

Objective: The strategy seeks to generate returns through a disciplined, concentrated equity portfolio that is designed to benefit from investment opportunities in blockchain. We seek companies that are utilising blockchain technology and platforms to reduce costs or accelerate growth through the creation of secure, efficient, trusted and overall more robust platforms for transactions and assets.
Benchmark: MSCI ACWI
Strategy inception: 1 March 2019

Investment team

: Our investment team of research analysts and portfolio managers work together across regions and sectors, helping to ensure that our investment process is highly flexible.

Want to find out more?

Jonathan Piskorowski

Research analyst, portfolio manager

Shawn Zhang

Senior research analyst, Quantitative Research team

Stephanie Brandaleone

Research analyst, Quantitative Research team

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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.

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.

Emerging markets risk: Emerging markets have additional risks due to less developed market practices.

Market capitalisation risk: Investing in small companies may be riskier and less liquid (i.e. harder to sell) than large companies. This means that their share prices may have greater fluctuations.

Volcker rule risk: The Bank of New York Mellon Corporation or one of its affiliates (“BNYM”) has invested in the strategy. As a result of restrictions under the “Volcker Rule,” which has been adopted by U.S. Regulators, BNYM must reduce its shareholding percentage so that it constitutes less than 25% of the strategy within, generally, three years of the strategy’s establishment (which starts when the strategy’s manager begins making investments for the strategy). Risks may include: BNYM may initially own a proportionately larger percentage of the strategy, and any mandatory reductions may increase strategy portfolio turnover rates, resulting in increased costs, expenses and taxes. Details of BNYM’s investment in the strategy are available upon request.

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.

Blockchain innovation companies risk: The value of securities of Blockchain Innovation Companies may be negatively impacted by changes in regulation and are dependent upon consumer and business acceptance of the distributed ledger technology. Distributed ledger technology is a new and relatively untested technology which could be vulnerable to fraud. The strategy’s value may be more subject to risks of developing technologies, competitive pressures and intellectual property rights challenges.