Our philosophy and process

  • Newton manages both the equity segment of the portfolio and overall asset allocation. The equity segment uses an actively managed ESG methodology which has evolved at Newton over the last 40 years. All investment decisions are predicated on two key factors: an investment’s eligibility based on how effectively sustainability is incorporated into its core business and strategy, and the requirement for upside potential and/or risk mitigation.

    Security selection is guided by our investment themes, which help us formulate our views about long-term trends across the investment landscape. The portfolio managers draw on the output of our global research team (including the responsible investment team embedded within it), and conduct their own research to ensure that the portfolio is composed of stocks in which we have strongest conviction of the asymmetry of risk and reward and the level of ESG execution or likelihood of ESG improvement within a company.

    We achieve diversification through having around 150 stocks with exposure to a variety of regions and industries, while we carefully consider a wide range of portfolio risks using modeling and optimization tools.

    ‘Red lines’ ensure that the companies in which we choose to invest 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 (3.6°F). We also incorporate a tobacco exclusion as we do not view tobacco businesses as compatible with our commitment to sustainable investment.

    We engage with companies where ESG issues are resolvable and can be improved. We provide regular reports for investors to view the impacts of engagement, and to show statistics such as the portfolio’s ESG rating and carbon footprint.

    The fixed-income segment of the portfolio uses Mellon Investment Corporation’s (Mellon) cost-effective and efficient index investment approach, with reference to the Bloomberg Barclays MSCI US Aggregate ESG Weighted Sector Neutral Index, a custom ESG index which is based on the Barclays US Aggregate Index. Mellon uses a stratified sampling approach to select bonds that match the important risk characteristics of the index (such as duration, liquidity, quality, sector, industry, yield and market beta). The index screens out investments in weapons, alcohol, gambling, tobacco, nuclear power, and the worst ESG-rated companies.

Investment team

Newton’s investment team has a wide range of backgrounds and varied experience. 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.

Mellon has a team of seasoned portfolio managers with decades of experience managing tightly tracking, risk-controlled index and beta portfolios across a myriad of market environments. The team as a whole has decades of experience managing index portfolios benchmarked to the Bloomberg Barclays US Aggregate and component indices.

17
years' average investment experience
11
years' average time at Newton
  • Paul Markham
    Paul Markham

    Portfolio manager, global equities

  • Yuko Takano
    Yuko Takano

    Portfolio manager, global equities

  • Jeff Munroe
    Jeff Munroe

    Investment leader, global equities

  • Rob Stewart
    Rob Stewart

    Head of responsible investment research

  • Andrew Parry
    Andrew Parry

    Head of sustainable investment

  • Victoria Barron
    Victoria Barron

    Responsible investment analyst

  • Ian Burger
    Ian Burger

    Head of governance and stewardship

  • Lloyd McAllister
    Lloyd McAllister

    Responsible investment analyst

  • Lottie Meggitt
    Lottie Meggitt

    Responsible investment analyst

  • Rebecca White
    Rebecca White

    Responsible investment analyst

  • Robert Hay
    Robert Hay

    Portfolio manager, global equities

  • Ben Smith
    Ben Smith

    Analyst, equity opportunities

  • Robert Marshall-Lee
    Robert Marshall-Lee

    Investment leader, emerging and Asian equities

  • Simon Nichols
    Simon Nichols

    Portfolio manager, UK equities

  • Naomi Waistell
    Naomi Waistell

    Portfolio manager, emerging and Asian equities

  • Sophia Whitbread
    Sophia Whitbread

    Portfolio manager, emerging and Asian equities

Strategy profile

Objective

The strategy looks to generate capital appreciation by investing in equity securities and debt/fixed-income securities of global companies that demonstrate attractive investment attributes and sustainable business practices.

Comparative index

Composite index comprised of 60% MSCI All Country World Index (NDR) and 40% Bloomberg Barclays MSCI US Aggregate ESG-Weighted Select Sector Neutral Index.

Typical number of holdings

Around 150 equities and 100 debt/fixed-income securities.

Strategy size

Below $350m (as at December 31, 2019)

Strategy inception

April 1, 2019
US RI report Sustainable Balanced

Responsible investment report

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

Download Report
NIMNA Sustainable Balanced strategy brochure

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.

Key investment risks

 

  • There is no guarantee that the strategy will achieve its objective.
  • 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.

Equity Component:

  • The equity component of the strategy is managed by Newton Investment Management (North America) Ltd.
  • This strategy invests in international 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 may invest in emerging markets. These markets have additional risks due to less developed market practices.
  • 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.

Fixed-Income Component:

  • The fixed-income component of the strategy is managed by Mellon Investments Corporation.
  • The fixed-income component of the strategy follows an index approach. For this portion of the strategy the investment manager does not attempt to manage market volatility, use defensive strategies or reduce the effects of any long-term periods of poor index performance.
  • Investments in bonds are affected by interest rates and inflation trends which may affect the value of the strategy.
  • The strategy may 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 investments that are not traded regularly and are therefore subject to greater fluctuations in price.