Investment approaches
SUSTAINABLE gLOBAL EQUITY INCOME
A global strategy which aims to generate stable returns by harnessing equity income from companies with sustainable business models, using a disciplined, repeatable process
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Investing in cash-generative companies, with a valuation screen to help achieve a dividend yield above that of the market
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Environmental, social and governance (ESG) analysis positively identifies companies which effectively incorporate sustainability into their core business and strategy, while avoiding companies with material ESG risks which could negatively affect future performance
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Global investment universe offers investors an opportunity to diversify their equity-income investments. Active stock selection is guided by our investment themes, integrated ESG approach, fundamentals and valuation
Our philosophy and process
- The strategy is conviction-based, with no regional constraints. Portfolios tend to hold stocks of cash-generative companies with highly attractive dividend yields. Every new holding typically has a prospective yield at least 25% greater than that of the market at the point of purchase. Any holding whose prospective yield falls below the market yield will trigger a sale.
- As we seek to positively influence companies as a shareholder or potential shareholder, we use the levers that are available to equity investors, including proxy voting and direct engagement with companies. While we do invest in those companies that already have strong ESG profiles, we prioritise companies that are improving their ESG performance. In this way, we seek to help drive positive ESG outcomes, while having the potential to achieve financial benefits through this change.
‘Red lines’ ensure that the companies that we choose to invest in do not violate the UN Global Compact’s ten principles that promote responsible corporate citizenship, or have characteristics which make them incompatible with the aim of limiting global warming to 2°C. We also incorporate a tobacco exclusion as we do not view tobacco businesses as compatible with our commitment to sustainable investment.
We provide regular reports for investors to view the impacts of engagement with companies, and to show statistics such as the portfolio’s ESG rating and carbon footprint.
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.
Investment team
Our Sustainable Global Equity Income strategy is managed by an experienced team. 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. Our dedicated responsible investment team is an integral part of the investment decision-making process. Guided by our global investment themes, the team works together to identify opportunities and risks through research and debate.
- 18
- years' average investment experience
- 11
- years' average time at Newton
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Ilga Haubelt
Head of Equity Income
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Robert Hay
Portfolio manager, global equity income
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Paul Flood
Portfolio manager, global equity income
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Jon Bell
Portfolio manager, global equity income
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Zoe Kan
Portfolio manager, emerging and Asian equity income
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Andrew Parry
Head of sustainable investment
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Ian Burger
Head of responsible investment
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Lloyd McAllister
Responsible investment analyst
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Rebecca White
Responsible investment analyst
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Nick Pope
Junior portfolio manager
Strategy profile
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Objective
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The strategy seeks to outperform the FTSE W World index by more than 2% per annum over rolling 5-year periods, by achieving income and capital growth from a global portfolio comprised of companies that typically yield at least 25% greater than the comparative index yield, and which demonstrate attractive investment attributes and sustainable business practices.*
*In order to prevent the portfolio from being a forced seller of securities that have suspended their dividend purely owing to the Covid-19 situation, a new sell discipline basket has been created specifically for such securities, which temporarily overrides the portfolio’s yield-based sell discipline. Securities falling into this basket may continue to be held providing there is a reasonable expectation that any dividends will be reinstated at a level consistent with the strategy’s yield criteria. The rationale for each affected security will be reviewed at least every six months.
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Comparative index
- FTSE W World Index
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Typical number of equity holdings
- 30-60
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Strategy size -
Below £200m (as at 30 June 2020) -
Strategy inception
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18 July 2019
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Strategy available through pooled UK vehicle
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BNY Mellon Sustainable Global Equity Income Fund
View Key Investor Information Document
Responsible investment report
Stewardship activities (voting and engagement) for the last quarter and ESG metrics.
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
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- There is no guarantee that the strategy will achieve its objective.
- This strategy invests in global markets which means it is exposed to changes in currency rates which could affect the value of the strategy.
- The strategy may use derivatives to generate returns as well as to reduce costs and/or the overall risk of the strategy. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment.
- The strategy invests in emerging markets. These markets have additional risks due to less developed market practices.
- 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.
- The strategy may invest in small companies which may be riskier and less liquid (i.e. harder to sell) than large companies. This means that their share prices may have greater fluctuations.
- The strategy follows a sustainable investment approach, which may cause it to perform differently to strategies that have a similar objective but which do not integrate sustainable investment criteria when selecting securities.