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About Newton

Newton’s story is one of purpose – to improve people’s lives by investing in a way that strives to deliver attractive outcomes to our clients and to help foster a healthy and vibrant world for all.

 

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This strategy is offered by Newton Investment Management North America LLC (‘NIMNA’) in the United States. NIMNA is part of the Newton Investment Management Group.

Strategy Overview

The Dynamic US Equity strategy (DUSE) applies the widely recognized academic theory of the Capital Asset Pricing Model (CAPM) and the Capital Market Line (CML) to develop a portfolio of three broad exposures (S&P 500®, long Treasury bonds, and cash) designed to outperform the S&P 500® Index with a similar level of risk.

The strategy allows for modest leverage (up to 50%) to dynamically allocate across these three broad exposures or risk premium. By design, fundamental valuation, macro, volatility and tail risk management are incorporated into the strategy, which historically has led to low downside participation and high upside participation.

Investment Team

Our investment team of research analysts and portfolio managers work together across regions and sectors, helping to ensure that our investment process is highly flexible.

A team of 17 investment professionals.

20
years’ average investment experience
13
years’ average time at Newton

Strategy Profile

Objective

DUSE seeks to outperform the S&P 500® Index while maintaining a similar level of risk. The strategy’s historical excess returns exhibit very low correlation to its peer group, including traditional stock selection and factor based approaches.

Benchmark

S&P 500® Index

The S&P 500® Index performance benchmark is used as a comparator for this strategy. Information about the indices shown here is provided to allow for comparison of the performance of the strategy to that of certain well-known and widely recognized indices. There is no representation that such index is an appropriate benchmark for such comparison.

Strategy inception

August 31, 1989

Past performance is not a guide to future performance. 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.

This strategy is offered by Newton Investment Management Ltd (‘NIM’). NIM is part of the Newton Investment Management Group.

Our Philosophy and Process

  • The strategy has a simple structure, with a stable core of predominantly traditional return-seeking assets, and a layer of risk-offsetting positions which aim to dampen volatility and preserve capital. Material ESG risks, opportunities and issues are considered as part of the investment research process.
  • The strategy is conviction-based, with no regional, sector or performance reference constraints. A constantly evolving and forward-looking approach seeks to anticipate change, manage risk, and identify opportunities.

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 Global Real Return strategy is managed by an experienced team with a wide range of backgrounds. Our investment team of research analysts and portfolio managers works together across regions and sectors, helping to ensure that our investment process is highly flexible. Guided by our global investment themes, we seek to identify opportunities and risks through research and debate.

20
years’ average investment experience
15
years’ average time at Newton

Strategy Profile

Objective

The strategy aims to deliver a total return of SOFR (30-day compounded) +4% per annum over 5 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

SOFR (30-day compounded) +4%*

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

Volatility

Expected to be between that of bonds and equities over the long term

Strategy size

US$13.3bn (as at Sept 30, 2022), including GBP, EUR, USD and AUD strategies

Strategy inception

Composite inception: July 1, 2009 (USD strategy); April 1, 2004 (GBP strategy)

NIMNA Global Real Return strategy factsheet

Quarterly factsheet

Facts on the strategy’s performance and positioning.


US RI report Global Real Return

Responsible investment report

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

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.

ESG analysis may vary depending on the type of security, investment rationale and investment strategy. Newton does not currently view certain types of investments as presenting ESG risks, opportunities and/or issues, and believes it is not practicable to evaluate such risks, opportunities and/or issues for certain other investments. In addition, Newton will make investment decisions that are not based solely on ESG considerations. In some cases, therefore, Newton may conclude that other attributes of an investment outweigh ESG considerations when making investment decisions.

Key Investment Risks

  • 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.
  • Liquidity Risk: The strategy may not always find another party willing to purchase an asset that the strategy wants to sell which could impact the strategy’s ability to sell the asset or to sell the asset at its current value.
  • 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 programs. 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..

This strategy is offered by Newton Investment Management North America LLC (‘NIMNA’) in the United States. NIMNA is part of the Newton Investment Management Group.

Strategy Overview

Our experience and process allow us to thoroughly evaluate commodity fundamentals. We typically allocate among equities with positive leverage to commodities. However, we will also consider allocating to those with more neutral leverage (more levered volume than price) and at times, those with negative leverage (commodity consumers). As a result, we believe we can effectively manage through an entire cycle, aiming to generate peer-competitive Sharpe ratio performance regardless of market conditions.

We believe that successful natural resources investing is best achieved through a process driven by “commodities first” research across an expansive opportunity set. Evaluation of such a universe requires deep knowledge of each commodity, and we leverage our analysts’ expertise, optimizing information within a framework of oversight and risk management.

  • Focused Research: Research coverage is aligned with each analyst’s specific area of commodity expertise.
  • Expanded Universe: A broader investment universe provides increased opportunity and flexibility.
  • Selection Driven: Stock selections are conducted by those closest to the information.
  • Managed Risk: Risk is managed both at the overall portfolio level, as well as the company level. Our multi-tiered risk management process is designed to identify specific risk factors through standardized and proprietary risk analysis, enabling us to focus on more customized risk factors and sources.

Investment Team

Our investment team of research analysts and portfolio managers work together across regions and sectors, helping to ensure that our investment process is highly flexible.

21
years’ average investment experience
10
years’ average time at Newton

Strategy Profile

Objective

The strategy seeks to provide hard assets exposure and maximize the Sharpe ratio for optimal risk/reward exposure.

Benchmark

S&P Global Natural Resources Index

The S&P Global Natural Resources Index performance benchmark is used as a comparator for this strategy. Information about the indices shown here is provided to allow for comparison of the performance of the strategy to that of certain well-known and widely recognized indices. There is no representation that such index is an appropriate benchmark for such comparison.

Strategy inception

July 1, 2008

Past performance is not a guide to future performance. 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.

This strategy is offered by Newton Investment Management Ltd (‘NIM’). NIM is part of the Newton Investment Management Group.

Our philosophy and process

  • The strategy follows an unconstrained, highly dynamic asset-allocation approach within a broad universe of global bonds; it can invest in government bonds, emerging-market sovereigns, high-yield bonds and investment-grade corporate debt. The strategy has the flexibility to manage currency exposure actively to generate additional returns.
  • A constantly evolving and forward-looking approach seeks to anticipate change, manage risk, and identify opportunities. Material ESG risks, opportunities and issues are considered as part of the investment research 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.

Investment team

Our Global Dynamic Bond strategy is managed by a focused, experienced fixed-income team. Our investment team of research analysts and portfolio managers works together across regions and sectors, helping to ensure that our investment process is highly flexible. Guided by our global investment themes, we seek to identify opportunities and risks through research and debate.

21
years’ average investment experience
15
years’ average time at Newton

Strategy profile

Objective

The strategy seeks to deliver a minimum return of SOFR (30-day compounded) +2% per annum over rolling 5-year periods, from a globally diversified portfolio comprised of multiple fixed-income asset classes. In doing so, it 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

SOFR (30-day compounded) +2%*

*Please note that on November 1, 2021, the performance benchmark for this strategy changed from 1-month USD LIBOR +2% to SOFR (30-day compounded) +2%.

Strategy size

US$2.3bn (as at Sept 30, 2022), including GBP, EUR, USD and AUD strategies

Strategy inception

Composite inception: September 1, 2010 (USD strategy); May 1, 2006 (GBP strategy)

NIMNA Global Dynamic Bond strategy factsheet

Quarterly factsheet

Facts on the strategy’s performance and positioning.

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.

ESG analysis may vary depending on the type of security, investment rationale and investment strategy. Newton does not currently view certain types of investments as presenting ESG risks, opportunities and/or issues, and believes it is not practicable to evaluate such risks, opportunities and/or issues for certain other investments. In addition, Newton will make investment decisions that are not based solely on ESG considerations. In some cases, therefore, Newton may conclude that other attributes of an investment outweigh ESG considerations when making investment decisions.

Key investment risks

  • 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.
  • 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.

This strategy is offered by Newton Investment Management North America LLC (‘NIMNA’) in the United States. NIMNA is part of the Newton Investment Management Group.

Strategy Overview

Our active approach, emphasis on stock selection, and disciplined implementation seeks robust all-weather performance. The approach is style-pure, solely focused on US large cap alpha generation within the US equities universe.

Investment Team

Our investment team of research analysts and portfolio managers work together across regions and sectors, helping to ensure that our investment process is highly flexible.

26
years’ average investment experience
24
years’ average time at Newton

Strategy Profile

Objective

The objective of the US Dynamic Large Cap Value strategy is to consistently outperform the Russell 1000 Value® index over a full market cycle, resulting in compelling index and peer relative performance.

Benchmark

Russell 1000® Value Index

The Russell 1000® Value Index performance benchmark is used as a comparator for this strategy. Information about the indices shown here is provided to allow for comparison of the performance of the strategy to that of certain well-known and widely recognized indices. There is no representation that such index is an appropriate benchmark for such comparison.

Strategy inception

January 1, 1994

Past performance is not a guide to future performance. 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.

This strategy is offered by Newton Investment Management Ltd (‘NIM’). NIM is part of the Newton Investment Management Group.

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.

Investment team

Our Global Emerging Markets Equity strategy is managed by an experienced team. Our investment team of research analysts and portfolio managers works together across regions and sectors, helping to ensure that our investment process is highly flexible. Guided by our global investment themes, we seek to identify opportunities and risks through research and debate.

13
years’ average investment experience
4
years’ average time at Newton

Strategy profile

Objective

The strategy seeks to outperform the MSCI Emerging Markets Index (NDR) by more than 3% per annum over rolling 5-year periods, by achieving long-term capital growth from a portfolio comprised predominantly of emerging-market securities.

Performance benchmark

MSCI Emerging Markets Index (NDR)

Typical number of equity holdings

40 to 70

Strategy size

US$1.5bn (as at Sept 30, 2022)

Strategy inception

May 2011

NIMNA Global Emerging Markets Equity strategy factsheet

Quarterly factsheet

Facts on the strategy’s performance and positioning.


US RI report Global Emerging Markets

Responsible investment report

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

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. Other attributes of an investment may outweigh ESG considerations when making investment decisions. The way that ESG considerations are assessed may vary depending on the asset class and strategy involved. The research team performs ESG quality reviews on equity securities prior to their addition to Newton’s research recommended list (RRL). ESG quality 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 quality reviews. Not all securities held by Newton’s strategies have an ESG quality review completed prior to investment, although since 2020 it has been a requirement for all (single name) equity securities to have an ESG quality review before they are purchased for the first time.

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 primarily invests in a single market which may have a significant impact on 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.
  • 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 programs. 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.

This strategy is offered by Newton Investment Management North America LLC (‘NIMNA’) in the United States. NIMNA is part of the Newton Investment Management Group.

Strategy Overview

Investment Team

Our investment team of research analysts and portfolio managers work together across regions and sectors, helping to ensure that our investment process is highly flexible.

A team of 18 investment professionals.

19
years’ average investment experience
12
years’ average time at Newton

Strategy Profile

Objective

The Risk Parity strategy seeks maximum total return at a specific targeted level of risk. The strategy aims to deliver a consistent amount of risk through time and adjusts exposures as market risk varies and as the relationship among strategy constituents changes in response to changing economic conditions.

Strategy inception

March 1, 2012

Past performance is not a guide to future performance. 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.

This strategy is offered by Newton Investment Management North America LLC (‘NIMNA’) in the United States. NIMNA is part of the Newton Investment Management Group.

Strategy Overview

We focus on high quality companies, especially those with products or services viewed as leaders in their market niches. Through our fundamental research and thematic insights, we seek to identify companies with attractive growth characteristics which can result in a sustainable growth trajectory. The strategy emphasizes companies with a notable business advantage, competitive or unique intellectual property (IP), solid cash flows, durable balance sheets and high quality management. Our approach emphasizes a long-term view to enable fundamental and thematic tailwinds to develop and drive stronger growth.

Our analytical insights are driven by our deep expertise, which we believe provides a unique advantage to our strategy. Our team of seasoned investment professionals have accumulated a breadth of expertise and industry experience over multiple business cycles, and each have a minimum of 10 years of investment experience. This domain expertise in the foundation of our thematic work, as well as differentiated company and industry insights.

We believe the following features differentiate our investment approach:

  • Investment Team Expertise: The team’s depth and experience stands out in our space. Our seasoned professionals have extensive domain expertise, with many covering their respective sector/industry for more than 10 years and in some cases over 20 years. This drives our bottom-up fundamental research, enabling the team to understand where there is real innovation and disruption and identify both structural headwinds and tailwinds.
  • Thematic Insights: The utilization of global investment themes has been part of the investment process for over fifteen years. We believe this framework provides a unique market perspective and highlights potential opportunities that peers may overlook.
  • Sustainable Growth: Our depth of fundamental research and use of thematic insights enables us to focus on sustainable growth opportunities over the next two to three years in contrast to the next two or three quarters. We focus on stock selection that relies on the accurate identification of a company’s long-term sustainable growth opportunity, which is critical to long-term price appreciation.
  • Emphasis on Risk Assessment: Our disciplined investment process includes an array of different quantitative and qualitative factors including, valuation, style and factor exposure, and rigorous investment thesis and price target adherence, provides the team with a deep understanding of portfolio holdings and allows them to capture relatively more of the potential upside and minimize downside in the portfolio.

Investment Team

Our investment team of research analysts and portfolio managers work together across regions and sectors, helping to ensure that our investment process is highly flexible.

29
years’ average investment experience
14
years’ average time at Newton

Strategy Profile

Objective

The strategy seeks to identify small-cap and mid-cap growth companies where we have a meaningfully different view of their potential success over the next two to three years. As a result, we focus on companies with long-term sustainable growth rates that we believe are not currently appreciated by the market.

Benchmark

Russell 2500™ Growth Index

The Russell 2500™ Growth Index performance benchmark is used as a comparator for this strategy. Information about the indices shown here is provided to allow for comparison of the performance of the strategy to that of certain well-known and widely recognized indices. There is no representation that such index is an appropriate benchmark for such comparison.

Strategy inception

April 1, 2003

Past performance is not a guide to future performance. 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.

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.