Our philosophy and process

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.

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.

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.

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.

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.

Investment team

Our Sustainable Global Emerging Markets strategy is managed by a team of two portfolio managers, who form part of Newton’s equity opportunities team. Our dedicated responsible investment team is an integral part of the investment process and has the power of veto. Guided by our global investment themes, we seek to identify opportunities and risks through research and debate.

24
years’ average investment experience
12
years’ average time at Newton

Strategy profile

Objective

To achieve long-term capital growth by investing in emerging-market securities that demonstrate attractive investment attributes and are deemed by Newton to be sustainable.

Performance benchmark

MSCI Emerging Markets Index (NDR)

Typical number of equity holdings

Typically 45-65 holdings


Strategy size

Below £200m (as at 30 Sept 2021)

Strategy inception

December 2021

Strategy available through pooled UK vehicle

BNY Mellon Sustainable Global Emerging Markets Fund

View Key Investor Information Document
View prospectus
Sustainable Global Emerging Markets 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.

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.
  • Geographic concentration risk: The strategy may have substantial investment exposure to a single market which may have a significant impact on the value of the strategy.
  • Emerging markets risk: Emerging markets have additional risks due to less-developed market practices.
  • Concentration risk: A fall in the value of a single investment may have a significant impact on the value of the strategy because it typically invests in a limited number of investments.
  • 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.
  • Sustainable strategies risk: The strategy follows a sustainable investment approach, which may cause it to perform differently than strategies that have a similar objective but which do not integrate sustainable investment criteria when selecting securities. The strategy will not engage in stock lending activities and, therefore, may forego any additional returns that may be produced through such activities.
  • 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.