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Investing in an Age of Unusual Change

We outline some areas of unusual change that are relevant for the investment landscape in emerging markets

Evergreening Evergrande: Calling Time

We unpick the implications of the growing crisis in China’s real-estate sector for investors.

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, political instability or less developed market practices.

Change Brings Opportunities for Long-Term, Structural Growth

The global pandemic may have created disruption and come at a heavy social and economic cost, but we believe its biggest implications for investors are as something that accelerates or exacerbates the areas of unusual change that we seek to take advantage of as emerging-market specialists, and which we tap to unearth long-term, structural growth. The emerging world is a growth opportunity that is hard to ignore, especially when one considers its rich potential growth profile:

Three Reasons to Invest in the Newton Global Emerging Markets Strategy

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

Newton will make investment decisions for the fund that are not based solely on ESG considerations. Other attributes of an investment outweigh ESG considerations when making investment decisions. The way that ESG considerations are assessed may vary depending on the asset class and strategy involved.

We believe that an active and highly selective approach, leveraging ESG considerations, is the best way to unearth exciting long-term growth opportunities in this sector.

Armor, Shield, First Aid
Emphasis on Quality and Governance
Our strategy aims to capture long-term value creation and seeks to invest in compounders – companies that generate real value from their growth and reinvest it for the benefit of all shareholders.

Number, Symbol, Text
Consistent, Repeatable Approach
The strategy follows a highly committed, active and repeatable process, which aims to deliver strong cumulative returns that are driven by a high-conviction, benchmark-agnostic approach. While the team doesn’t exclude whole countries from the investment universe, it may decide that the investment case for one specific economy is not as robust as for other countries.

Plot, Plan, Diagram
Experience and Track Record
Newton has over 20 years’ experience in investing in emerging markets. Investors can benefit from the broad expertise of Newton’s emerging and Asian equity team and the proprietary research produced by Newton’s team of global sector and responsible investment analysts.
Road, Freeway, Intersection

Explore Newton’s Global Emerging Market Strategy

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

Meet the team

Emerging Markets Update: Investing in Long-Term Structural Growth

Our emerging-markets team explain their investment process and reveal some of their favorite long-term growth stories.

Paul Birchenough
Portfolio manager

Accessories, Accessory, Tie

Paul Birchenough is a member of Newton’s equity opportunities team. Paul joined Newton in October 2020 to manage global emerging markets portfolios. Prior to joining Newton, Paul was a global emerging-market equity portfolio manager at AXA Investment Managers, where he had worked since April 2011. Prior to joining AXA Investment Managers, Paul was a research analyst at Nevsky Capital. Before joining Nevsky Capital, Paul held various roles at KPMG, including positions in corporate finance, transaction services and audit. Paul has a BSc (Hons) in Mathematics from Nottingham University and is an Associate Chartered Accountant.

Ian Smith
Portfolio manager

Accessories, Tie, Accessory

Ian is a member of Newton’s equity opportunities team. Ian joined Newton in October 2020 to manage global emerging markets portfolios. Prior to joining Newton, Ian was a global emerging market equity portfolio manager at AXA Investment Managers, where he had worked since February 2012. Prior to joining AXA Investment Managers, Ian was a research analyst covering Asian financials at Matrix Group. Before joining Matrix Group, Ian was a research analyst covering emerging market financials at Nevsky Capital. Ian has a BA in Economics and Politics from Durham University and gained ACA qualification in 2003.

To learn more about global emerging markets, contact the team today

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.

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.

* https://www.yardeni.com/pub/mscipe.pdf 23 March, 2021
** https://www.weforum.org/agenda/2020/07/the-rise-of-the-asian-middle-class 13 July, 2020