UK Lgps Sustainable Real Return

Our philosophy and process

  • Sustainable ‘red lines’ ensure the poorest-performing companies are not eligible for investment, such as companies which violate the UN Global Compact Principles of sustainable corporate performance. Companies which we think are incompatible with the aim of limiting global warming to 2°C are also excluded.
  • We engage with companies where ESG issues are resolvable and can be improved, and report on that activity. We will not invest in any company that derives more than 10% of its turnover from the production and sale of tobacco.

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 Real Return strategy is managed by an experienced team with a wide range of backgrounds. 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.

22
years’ average investment experience
12
years’ average time at Newton
  • Philip Shucksmith
    Philip Shucksmith

    Portfolio manager, Real Return team

  • Matthew Brown
    Matthew Brown

    Portfolio manager, Real Return team

  • Aron Pataki
    Aron Pataki

    Co-head of Real Return team

  • Andy Warwick
    Andy Warwick

    Co-head of Real Return team

  • Lars Middleton
    Lars Middleton

    Portfolio manager, Real Return team

  • Brendan Mulhern
    Brendan Mulhern

    Global strategist, Real Return team

  • Chris King
    Chris King

    Senior portfolio analyst, Real Return team

  • Catherine Doyle
    Catherine Doyle

    Investment specialist

Strategy profile

Objective

The strategy has an absolute-return style performance aim, while seeking to preserve capital, through security selection, diversification and simple hedging strategies. The strategy invests in well-run businesses that both have durable financial and competitive positions and manage positively the material impacts of their operations and products on the environment and society.

Performance benchmark

The strategy aims to deliver a minimum return of SONIA (30-day compounded) +4% per annum over 5 years before fees.* 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.

* Please note that on 1 October 2021, the performance benchmark for this strategy changed from 1-month GBP LIBOR +4% to SONIA (30-day compounded) +4%.

Literature

RI report Sustainable real return

Responsible investment report

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

Download Report

Quarterly video update: Q2 2021

Quarterly video update
Video

Sustainable Real Return – quarterly outlook

Phil Shucksmith discusses regime change, and what this means for the energy transition.
02 November 2023
Macro views, Real Return, Sustainable
Defining our approach to net zero
Article

Defining our approach to net zero

Defining Newton's approach to driving down carbon emissions.
07 September 2023
Defined contribution, Emerging markets & Asia, Newton philosophy, Responsible investment, Sustainable

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

  • 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 the returns to be significantly different than expected.
  • 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.
  • Investments in bonds are affected by interest rates and inflation trends which may affect the value of the strategy.
  • The strategy holds bonds with a low credit rating that have a greater risk of default. These investments may affect the value of the strategy.
  • The strategy may invest in emerging markets. These markets have additional risks due to less developed market practices.
  • The strategy may invest in investments that are not traded regularly and are therefore subject to greater fluctuations in price.
  • 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 similar objectives but which do not integrate sustainable investment criteria when selecting securities.