Solution focus
Newton's suite of income strategies seek to achieve income distributions and long-term capital growth. The philosophy behind the solutions is that the compounding of dividends is the dominant source of long-term real returns.
Why equity income stocks are attractive
Prospects for dividend stocks look attractive, income stocks look relatively cheap compared to the overall market and could offer investors protection from the impact of inflation.
1
Dividend prospects remain bright
The potential for slower long-term growth and lower capital returns from equity markets could make the income component of overall returns more significant. Newton’s equity income team expects dividend prospects to remain relatively healthy, especially in companies with safe balance sheets and low payout ratios. These are often well-known brand names that have successfully transitioned over time and through multiple economic cycles including periods of inflation.
2
Dividend Sustainability
Newton believes dividends look more sustainable today than in previous market downturns. This is because during the pandemic companies reduced payout ratios. Distributing a lower percentage of earnings to shareholders means dividend coverage looks high, creating a buffer. The defensive nature of dividend-paying companies can offer inflation protection.
3
Shift in the macro environment more favourable for income stocks
Income stocks have traditionally performed better relative to the broader equity market during periods of higher inflation. Amid the global recovery from the pandemic, they have demonstrated an ability to decouple from growth stocks, especially when the latter have come under pressure. Dividends matter more in markets with higher inflation, volatility and lower returns.
Value-orientated companies paying good dividend yields act differently to the rest of the market in a more inflationary environment
JON BELL
PORTFOLIO MANAGER, NEWTON INVESTMENT MANAGEMENT
Income Fund Range
Brought to you by Newton Investment Management: a global multi-specialist investment manager with a full spectrum of research-driven solutions.
Why Newton for Income Solutions
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Solution focus
Newton's suite of income strategies seek to achieve income distributions and long-term capital growth. The philosophy behind the solutions is that the compounding of dividends is the dominant source of long-term real returns.
Scale
Newton manages £30.3 bn in equity income strategies across: Global, US, UK, Asian, Emerging Markets and Infrastructure.
Expertise recognised
The investment team has more than 24 years’ investment experience2 and is responsible for managing over 30% of Newton’s assets under management1
Process
- Strict buy & sell discipline
- Focus on dividend sustainability
- Consideration of themes, fundamentals and Environmental, Social and Governance (ESG)3 issues
- Valuation margin of safety
Experience
Newton’s equity income team comprises 13 investment professionals with an average 24 years’ investment experience and 18 years at Newton2.
Scale
Expertise recognised
Process
Experience
Solution focus
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*Source: Newton. 31 December 2024. Newton global assets under management (AUM) is the combined total assets under management of Newton Investment Management Limited (‘NIM’), Newton Investment Management North America LLC (‘NIMNA’) and Newton Investment Management Japan Limited (‘NIMJ’). Desk asset totals may include portfolios where team members from different investment desks may also act in a lead or alternate capacity.
2 Years’ investment experience and tenure at firm are team average numbers as at 31 December 2024, with years at firm relating to tenure at Newton and/or Mellon Investment Corporation.
3 Investment decisions are not solely based on environmental, social and governance (ESG) factors and other attributes of an investment may outweigh ESG considerations when making decisions. The way that material ESG factors are assessed may vary depending on the asset class and strategy involved and ESG factors may not be considered for all investments.
Meet the team
Zoe Kan
Portfolio manager, Newton Investment Management
James A Lydotes
Head of equity income and deputy CIO equity, Newton Investment Management
John Bailer
Deputy head of equity income, Newton Investment Management
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
Contact us
The value of investments can fall. Investors may not get back the amount invested. Income from investments may vary and is not guaranteed.
Please refer to the prospectus and the KIID/KID before making any investment decisions. Documents are available in English and an official language of the jurisdictions in which the Fund is registered for public sale. Go to www.bnymellonim.com.
2177300 Exp: 31 December 2025
