Multi-Asset Diversified Return Investment Strategy

Strategy highlights

: Fundamental, active and flexible – directly invested portfolio aiming to deliver strong risk-adjusted returns with an asymmetric profile

Controlling risk through diversification at both asset class and security level

Absolute-return approach focusing on capital preservation – allowing investors potential to benefit from compounding and time

Our philosophy and process

: The strategy invests in a diversified range of assets, from equities and bonds to alternative assets. A constantly evolving and forward-looking approach seeks to anticipate change, manage risk, and identify opportunities.

ESG (environmental, social and governance) considerations are integrated throughout the research process 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 themes to help identify opportunities.

Investment team

Our Multi-Asset Diversified Return strategy is managed by an experienced team. 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.

24: years’ average investment experience
15: years’ average time at Newton

Paul Flood

Head of mixed assets investment
Bhavin Shah

Portfolio manager, multi-asset team
Hilary Meades

Head of charities investment
Alison El-Araby

Portfolio manager, multi-asset team
Simon Nichols

Portfolio manager, Global Opportunities team
Janice Kim

Portfolio manager, multi-asset team

Strategy profile

Objective: The strategy seeks to deliver a total return of SONIA (30-day compounded) +3% p.a. over rolling 5-year periods from a globally diversified portfolio. 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.
Performance benchmark: SONIA (30-day compounded) +3%*

Typical number of holdings: Minimum of 120

Volatility: Expected to be between that of bonds and equities over the long term
Strategy size: £0.6bn (as at 31 March 2023)
Strategy inception: Composite inception: 1 May 2003
Strategy available through pooled UK vehicle: BNY Mellon Multi-Asset Diversified Return Fund

View fund performance
View Key Investor Information Document
View prospectus
: * Please note that on 1 October 2021, the performance benchmark for this strategy changed from 1-month GBP LIBOR +3% to SONIA (30-day compounded) +3%.

Strategy factsheet

Performance and commentary for the last quarter.

Download Factsheet

Responsible investment report

Stewardship activities (voting and engagement) for the last quarter and ESG metrics.

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Brochure

More detail on the strategy’s investment approach.

Download Brochure

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.

Newton will make investment decisions that are not based solely on ESG considerations. Those considerations are among many inputs into the fundamental analysis. Other attributes of an investment may outweigh ESG considerations when making investment decisions. The way that material ESG considerations are assessed may vary depending on the asset class and strategy involved. As of September 2022, the research team performs ESG analysis on equity securities prior to their addition to Newton’s Research Recommended List (RRL). ESG reviews are not performed for all fixed income securities. The portfolio managers may purchase equity securities that are not included on the RRL and which do not have ESG reviews. Not all securities held by Newton’s strategies have an ESG review completed prior to investment.

Key investment risks

: Objective/Performance risk: There is no guarantee that the strategy will achieve its objectives.

Performance aim risk: The performance aim is not a guarantee, may not be achieved and a capital loss may occur. Strategies which have a higher performance aim generally take more risk to achieve this and so have a greater potential for returns to vary significantly.

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.

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 strategy.

Credit ratings and unrated securities risk: Bonds with a low credit rating or unrated bonds have a greater risk of default. These investments may negatively affect the value of the strategy.

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.

CoCos risk: Contingent Convertible Securities (CoCos) convert from debt to equity when the issuer’s capital drops below a pre-defined level. This may result in the security converting into equities at a discounted share price, the value of the security being written down, temporarily or permanently, and/or coupon payments ceasing or being deferred.

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.

Investment in infrastructure companies risk: The value of investments in Infrastructure Companies may be negatively impacted by changes in the regulatory, economic or political environment in which they operate.