Discover Income Solutions at Newton Investment Management
Why income stocks are attractive now
There are several reasons why we believe that income stocks could be an attractive option for investors in 2023:
1
Income prospects look attractive versus other income alternatives. Dividends may provide better inflation protection, and they are often more sustainable owing to many companies lowering payout ratios.
2
The potential for slower growth and lower capital returns from equity markets could make the income component of overall returns more significant.
3
Income stocks can provide diversification to any portfolio. Amid the global recovery from the pandemic, they have demonstrated an ability to decouple from growth stocks, tended to when the latter have come under pressure.
Value-orientated companies paying good dividend yields act differently to the rest of the market in a more inflationary environment
$12+ billion in
100+ clients worldwide
100+ clients worldwide
100+ clients worldwide
100+ clients worldwide
Dividend prospects to remain bright in 2023
Newton’s equity income team expects earnings and dividend growth to remain relatively healthy in companies with safe balance sheets and low payout ratios – those with a track record of successfully adapting to a changing world. These are often well-known brand names that have successfully transitioned over time, including through world wars, inflation and deflation.
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.
Shift in the macro environment more favourable for income stocks
Compounding of dividends is the dominant source of long-term returns
Impact of dividends, United States, 1900-20191
For illustrative purposes only.
Note: 1 Bespoke US stock index, Prof Robert Shiller, Yale University, August 2020
Source: Prof Robert Shiller, Yale University, August 2020.
Newton's Income Solutions
The value of investments can fall. Investors may not get back the amount invested. Income from investments may vary and is not guaranteed.
Past performance is not a guide to future performance.
Source: evestment. 10 year data as aof 31 March 2023. Performance calculated as a total return gross of fees in USD. Fees and charges apply and can have a material impact on the performance of your investment.
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
focus
*Source: Newton. 31 March 2023
Solution focus
Newton's suite of sustainable strategies seek both positive investment returns and positive societal outcomes.
Team
NEWTON EQUITY INCOME TEAM
managers1
experience2
at firm2
MANAGING 18% OF NEWTON AUM
1 Excludes UK Equity Income portfolio managers,
2 Years’ investment experience and tenure at firm are team average numbers as at 31 March 2023 with years at firm relating to tenure at Newton and / or Mellon Investment Corporation. Source: Newton group of companies, 31 March 2023
Newton's Income Fund Range
The value of investments can fall. Investors may not get back the amount invested.
Resources
Resilient sectors in a volatile economy
Outlook is bright for dividends
Tools to fight inflation - infrastructure
Can income stocks continue to shine in 2023?
US equity income: search for quality
Recalibrating in Asia – with income
Historical track record %
Past performance is not a guide to future performance
*Simulated performance results have certain inherent limitations. Simulated results do not represent actual trading/returns and are not a reliable indicator of future performance. Fees and charges apply and can have a material effect on the performance of your investment.
These synthetic returns were derived by synthetically removing the impact of hedging instruments from an actual Global Infrastructure Dividend Focus Equity mandate hedged to US Dollars. This unhedged performance stream includes the performance of client cash and investments managed in the Global Infrastructure Dividend Focus Equity strategy to present the performance results of what an unhedged mandate could have achieved over this time period.
2021 | 2020 | 2019 | 2018 | 2017 | |
Newton Global Equity Income strategy | 15.91 | 3.01 | 22.1 | 0.71 | 8.93 |
FTSE World | 22.07 | 12.74 | 22.79 | -3.09 | 13.34 |
Newton Global Infrastructure Dividend Focus Equity* strategy | 16.29 | -12.56 | 21.22 | -6.03 | 17.48 |
S&P Global Infrastructure | 11.05 | -6.49 | 25.75 | -10.37 | 19.07 |
Newton Asian Equity Income strategy | 6.95 | 5.95 | 14.81 | 1.27 | 12.89 |
FTSE Asia Pacific ex-Japan TR | -0.1 | 19.42 | 14.48 | -8.51 | 23.37 |
Newton US Equity Income strategy | 17.63 | -8.57 | 21.15 | -6.41 | 11.68 |
FTSE All-Share | 18.32 | -9.82 | 19.17 | -9.47 | 13.1 |
Newton US Equity Income RP | 30.85 | -1.56 | 29.65 | -7.84 | 16.33 |
S&P 500 | 28.71 | 18.4 | 31.46 | -7.84 | 16.33 |
Newton Multi-Asset Income Strategy | 11.53 | 4.07 | 15.61 | -6.11 | 12.12 |
MSCI AC World | 10.73 | 10.53 | 15.46 | -1.98 | 8.65 |
YTD 2023
| 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
Newton Asian Equity Income strategy | 0.72 | 0.84 | 6.95 | 5.95 | 14.81 | 1.27 | 12.89 |
FTSE Asia Pacific ex-Japan TR | 0.80 | -5.88 | -0.10 | 19.42 | 14.48 | -8.51 | 23.37 |
Newton Global Equity Income strategy | 2.10 | 8.91 | 15.91 | 3.01 | 22.10 | 0.71 | 8.93 |
FTSE World | 4.81 | -7.16 | 22.07 | 12.74 | 22.81 | -3.09 | 13.34 |
Newton Global Infrastructure Dividend Focus Equity strategy | 4.94 | -7.39 | 16.29 | -12.56 | 21.22 | -6.03 | 17.48 |
S&P Global Infrastructure | 3.94 | -0.17 | 11.87
| -5.76 | 26.99 | -9.50 | 20.13 |
Newton Multi-Asset Income Strategy | 2.59 | -0.58 | 12.00 | 4.20 | 16.34 | -5.12 | 13.08 |
Newton Income Stock Strategy | -0.32 | 4.62 | 31.02 | -1.83 | 29.30 | -7.94 | 16.11 |
S&P 500 | 7.50 | -18.11 | 28.71 | 18.40 | 31.49 | -4.38 | 21.83 |
Newton UK Income Strategy | 3.86 | 9.69 | 17.62 | -8.57 | 21.15 | -6.41 | 11.68 |
FTSE All-Share | 3.08 | 0.34 | 18.32 | -9.82 | 19.17 | -9.47 | 13.10 |
Source: Newton, eVestment. Data as at 31 March 2023. Newton Global Equity Income strategy, Newton Asian Equity Income strategy, Newton UK Equity Income strategy and Newton Multi-Asset Income strategy performance calculated as a total return, income reinvested, gross of fees in GBP. Newton Global Infrastructure Dividend Focus Equity strategy and Newton Income Stock performance calculated as a total return, income reinvested, gross of fees in USD. Fees and charges apply and can have a material effect on the performance of your investment.
1418960
