Future Food Investment Strategies

Strategy highlights

: Enables investors to gain targeted exposure to long-term opportunities arising across food and agriculture-related industries worldwide
Long-term thematic research identifies drivers of change, providing a framework for idea generation
Investing in companies that positively manage the material impacts of their operations and products on the environment and society
Actively omitting companies involved in areas of high social cost, environmental degradation or violators of the UN Global Compact Principles

Our philosophy and process

: Themes seek to identify the major areas of structural change in the world. This structural change can be political, economic, social, technological, or environmental; its impact will manifest across traditional economic sectors, and will be significant in magnitude and long-term in duration. Themes are a critical element of our idea-generation process and, alongside evaluation of fundamentals and ESG considerations, constitute a key component of our valuation of securities.

It is our view that significant areas of structural change, such as growing populations, changing consumer demand and well-known threats to the natural world, will drive unprecedented demand for new food and agriculture technological innovations across the global food supply chain for years to come. The strategy seeks to invest in companies that are well placed to thrive in providing such solutions.
: Sustainable ‘red lines’, with responsible investment team validation, seek to ensure there is no investment in security issuers that:
: Breach the UN Global Compact
Are incompatible with a 2˚C world
Are deemed to have material ESG risks which are likely to negatively affect future performance and are associated with significant social or environmental harm.
: The strategy seeks to avoid investing in companies that participate in specific areas of activity that we deem to be harmful from an environmental and/or social perspective.

Investment team

The strategy is managed by a team with a wide range of backgrounds. In-house research analysts are at the core of our investment process, and our multidimensional research platform spans fundamental, thematic, ESG, quantitative, geopolitical, investigative and private-market research to promote better-informed investment decisions.

Strategy profile

Objective: The strategy aims to achieve long-term capital growth while promoting environmental and social characteristics by investing globally in companies engaged in the food supply chain.
Performance benchmark: MSCI AC World NDR
Strategy inception: January 2021

Newton will make investment decisions that are not based solely on ESG considerations. Other attributes of an investment may outweigh ESG considerations when making investment decisions. The way that ESG and sustainability considerations are assessed and the assessment of their suitability for Newton’s sustainable strategies may vary depending on the asset class and strategy involved. For Newton’s sustainable strategies, ESG reviews are performed prior to investment for corporate investments (single name equity and fixed income securities). The analysis will then also follow the Newton sustainable investment process to ensure it fits with the wider Newton sustainable investment philosophy.

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.
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 Strategy can lose significantly more than the amount it has invested in derivatives.
Credit risk: The issuer of a security held by the strategy may not pay income or repay capital to the strategy when due.
Emerging markets risk: Emerging Markets have additional risks due to less-developed market practices.
Shanghai-Hong Kong Stock Connect and/or the Shenzhen-Hong Kong Stock Connect (‘Stock Connect’) risk: The strategy may invest in China A shares through Stock Connect programmes. These may be subject to regulatory changes and quota limitations. An operational constraint such as a suspension in trading could negatively affect the strategy’s ability to achieve its investment objective.
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.
Environmental, social and governance (ESG) investment approach risk: This strategy can be considered to follow an ESG investment approach or incorporate elements of an ESG investment approach, which may cause it to perform differently than other strategies that have a similar objective but which do not integrate an ESG investment approach (or elements thereof) when selecting securities. In addition, in following an ESG investment approach, the strategy is dependent upon information and data from third parties (which may include providers for research reports, screenings, ratings and/or analysis such as index providers and consultants). Such information or data may be incomplete, inaccurate or inconsistent.

Insights

Audio

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How has the generative artificial intelligence (AI) market evolved, and where is it heading? We discuss with Rob May, an AI entrepreneur and an angel investor in early-stage AI companies.

22 March 2023