BNY Mellon Global Leaders Fund

Fund Manager

Team approach

Fund Inception

7 Dec 2016

Why invest in this fund?

Long-term global focus

Walter Scott’s distinctive investment process is ideally suited to managing global equity portfolios. The firm has a clear and consistent investment philosophy and proven research process.

Concentrated portfolio of globally leading companies

Investment through fundamental analysis and selection of 25-30 industry leading companies with excellent long term growth potential operating with superior business models underpinned by a sustainable competitive advantage.

Buy and hold high conviction

Buy and hold high conviction: A traditional, long-only ‘buy and hold’ approach to global equity management with low portfolio turnover and longevity of investment horizon.

Fund positioning

The research team at Walter Scott focuses on businesses that can display rigour and discipline in the manner in which they deploy capital throughout the business cycle. The cornerstone of our investment process is the pursuit of companies that can add value and act as responsible stewards of shareholder’s funds. We eschew bloated surfers of the cycle with unsustainable business models that have gorged themselves on debt and spent recklessly.

Each dollar spent should enhance value, not dilute returns.

It is of course the case that to maintain market leadership, innovate, and thrive across cycles, businesses have to invest and do so in a disciplined fashion. We have no interest in companies that underinvest in their business in order to meet short-term targets. They are typically poor candidates for compounding profits. Far better that they invest appropriately to bolster and grow the company’s brands and franchise value, with the goal of achieving good returns over the long term. At the other end of the scale, those that have embarked on an undisciplined capex binge and miscalculated end demand, may find their returns on investment are diminished when the economic cycle turns. When we look at how businesses develop and expand, we have to be assured that they are spending productively, and that each dollar spent is not return dilutive but value enhancing.

There are a number of metrics we employ to examine how smartly a company is spending. All of them hinge on a key tenet – the return on invested capital has to handsomely exceed the cost of capital throughout cycles. To this end, we assess and analyse capital and operational expenditure, how companies control costs, the use of M&A, intellectual property purchases; making qualitative and quantitative assessments of their impact on bottom lines and cash flows. Over the long run, a company’s ability to add value to every dollar spent will become apparent in the numbers.

Fund performance

Annual Performance (%)​


Source: Lipper as at 31 December 2019. Fund performance USD W (Acc.) calculated as total return, based on net asset value, including charges, but excluding initial charge, income reinvested gross of tax, expressed in share class currency. The impact of the initial charge, which may be up to 5%, can be material on the performance of your investment. Performance figures including the initial charge are available upon request.

Agents of Change in practice

Technology: Kone

Based in Finland, KONE is a leading manufacturer of elevators and escalators. The company also provides maintenance services and modernisation solutions. With more than 1,000 offices in over 60 countries, KONE boasts an impressive global reach and geographically diversified revenues. It has long been recognised as one of the world’s most innovative companies, as evidenced by 3,000+ patents and more than 1,000 professionals engaged in research and development. All KONE’s escalators and elevators are based on industry-leading energy efficient technology.
The elevator and escalator industry enjoys a number of structural growth drivers: urbanisation in the developing economies; an ageing population and elevator base; tightening safety regulation; and increased demand for energy efficiency. Maintenance and modernisation is central to this growth story, and KONE has built a strong presence in this area through a series of small-scale acquisitions. Indeed, a majority of its 450,000 customers are now maintenance customers. These relationships are typically long-term and stable, providing a highly resilient revenue stream that has grown every year since 1995. The continued growth of this part of the business offers significant potential for increased profitability.

Healthcare: Novo Nordisk

Danish pharmaceutical firm Novo Nordisk has been a pioneer in its field for almost a century. Formed by the 1989 merger of Nordisk Insulinlaboratorium and Novo Terapeutisk Laboratorium, founded in 1923 and 1925 respectively, the company is the world’s largest supplier of insulin and insulin-related products. As the Western diet and more sedentary lifestyles become increasingly prevalent, diabetes has emerged as a global health crisis. Today, around 9% of the world’s adult population lives with the condition, the figure having doubled since 2000. Novo Nordisk is at the forefront of combatting this pandemic. Novo Nordisk was bought for MGF in 2009.
Unsurprisingly, research and development (R&D) is a vital component of Novo’s business model. The company has a number of R&D centres around the world, including in China, India and the US, as well as in Denmark itself. It also has more than 70 partnerships globally. The scale of this commitment to R&D is evidenced by the fact it accounts for 19% of the company’s total workforce. The result is a highly profitable company with an impressive track record of innovation, which is reflected in a strong product pipeline that should support future growth and allow the company to continue to take market share. Novo has a high and sustainable return structure, no long-term debt and generates attractive levels of cash flow.

About Walter Scott

Walter Scott & Partners Limited is a classical, fundamental and long-term global equity investment management firm.

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Investment Managers are appointed by BNY Mellon Investment Management EMEA Limited (BNYMIM EMEA), BNY Mellon Fund Management (Luxembourg) S.A. (BNY MFML) or affiliated fund operating companies to undertake portfolio management activities in relation to contracts for products and services entered into by clients with BNYMIM EMEA, BNY MFML or the BNY Mellon funds.

Past performance is not a guide to future performance.

The value of investments can fall. Investors may not get back the amount invested. Income from investments may vary and is not guaranteed.

Objective/Performance Risk: There is no guarantee that the Fund will achieve its objectives.

Currency Risk: This Fund invests in international markets which means it is exposed to changes in currency rates which could affect the value of the Fund.