DISCOVER INCOME SOLUTIONS
Income stocks could continue be an attractive option for investors this year, discover why.
Why income stocks are attractive now
Prospects for dividend stocks look attractive, income stocks look relatively cheap compared to the overall market and could offer investors protection in an inflationary environment.
Dividend prospects to remain bright in 2023
The potential for slower 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, including through world wars, and periods of inflation.
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. Dividends may provide better inflation protection, and they are often more sustainable owing to many companies lowering payout ratios.
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
Income fund range
Brought to you by Newton Investment Management: a global multi-specialist investment manager with a full spectrum of research-driven solutions.
BNY Mellon Global Income Fund
Fund manager
Robert Hay and Jon Bell
BNY Mellon Global Infrastructure Income Fund
Fund manager
James Lydotes
BNY Mellon UK Income Fund
Fund manager
David Cumming and Tim Lucas
BNY Mellon Asian Income Fund
Fund manager
Zoe Kan
BNY Mellon Multi-Asset Income Fund
Fund manager
Paul Flood
BNY Mellon US Equity Income Fund
Fund manager
John Bailer
Why Newton for income solutions
SOLUTION FOCUS
Newton's suite of income strategies seek to achieve income distributions and long-term capital growth. The philosophy behind the solutions in that the compounding of dividends is the dominant source of long-term real returns.
SCALE
£22.5 bn in income strategies across: Global, US, UK, Asian, Multi-Asset, Emerging and Infrastructure.1
EXPERTISE RECOGNISED
The investment team has more than 19 years’ experience investing in income strategies and is responsible for managing 18% 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) issues
- Valuation margin of safety
EXPERIENCE
13 portfolio managers2 with average 22 years' investment experience and 16 years at Newton supported by a global research team with an average 14 years' investment experience and 8 years at firm3.
1. Source: Newton. 30 June 2023. Assets under management (AUM) relates to the combined assets managed by the Newton Investment Management group. From 1 September 2021, Newton group of companies includes Newton Investment Management Limited (NIM) and Newton Investment Management North America LLC (NIMNA).
2. Excludes UK Equity Income portfolio managers.
3. Years’ investment experience and tenure at firm are team average numbers as at 30 June 2023 with years at firm tenure relating to tenure at Newton and / or Mellon Investment Corporation. Source: Newton group of companies, 30 June 2023
MEET THE TEAM
Jon Bell
Through his tenure at Newton, Jon has led both the global equity and multi-asset teams and been responsible for a number of multi-asset and global equity portfolios.
As well as his extensive investment roles at the firm, he has also spent time as a member of the commercial team involved in discussing client portfolios and tailoring strategies to meet client requirements. He sits on Newton’s investment risk oversight groups. Jon joined the Newton equity income team in March 2020, and is responsible for both core and sustainable global equity income strategies.
Jon joined Newton in 1995 and has a degree in natural sciences from Cambridge University.
Zoe Kan
Zoe is a portfolio manager on the Emerging Markets and Asia Equities team. Zoe joined Newton in 2000 as a dedicated Asia Pacific ex-Japan specialist. Having managed unconstrained Asian equity portfolios, she became lead manager on the Asian Equity Income Funds in 2016. She is also a lead manager on the Emerging Income Fund.
Zoe holds a degree in German and Economics and is a CFA1 Charterholder. Outside of work, Zoe enjoys music and spending time with her young family.
James Lydotes
Jim is Newton’s head of equity income and deputy chief investment officer of equities. Jim is the lead portfolio manager for the Global Equity Income strategy. He has also been the lead manager for the Global Infrastructure Dividend Focus Equity and Global Healthcare REIT strategies since their inceptions in 2011 and 2015, respectively. He has engineered both outcome-oriented income strategies to provide exposure to distinct themes in a risk-aware framework.
Jim joined Newton in September 2021, following the integration of Mellon Investments Corporation’s equity and multi-asset capabilities into the Newton Investment Management Group. Before joining Newton, Jim had 22 years of experience across multiple roles at Mellon Investments Corporation and The Boston Company Asset Management (both BNY Mellon group companies).
Prior to joining BNY Mellon, Jim served as a fixed-income business analyst at Wellington Management Company.
Jim earned a BA in Economics from Syracuse University. He received his CFA1 designation in 2011 and is a member of the CFA Institute, the CFA Society Boston and the Boston Committee on Foreign Relations.
Paul Flood
Paul Flood is Head of Mixed Assets Investment, and also lead manager of Newton Multi-Asset Diversified Return strategy, the Newton Multi-Asset Income strategy and the Newton Multi-Asset Growth strategy. He also provides leadership and analysis on asset allocation, derivatives and convertible bonds for the wider firm, having spent the earlier part of his career working on strategic asset allocation and derivative strategy. Paul is responsible for generating ideas within alternative assets and has been leading in this area since 2008, having joined Newton Investment Management in 2004. He is a member of the macro allocation group and provides feedback to the wider house on strategic and tactical asset allocation.
David Cumming
David Cumming joined Newton as Head of UK Equities in March 2022. David manages the BNY Mellon UK Income Fund with Tim Lucas, and heads up Newton’s UK equity investment team, working with Louise Kernohan and Georgina Cooper who run Newton’s UK Equity and Sustainable UK Opportunities strategies. David has been an active UK equity manager for more than 35 years. He was most recently Chief Investment Officer of Equities at Aviva Investors. Before that, he was Head of Equities at Standard Life Investments, and prior to that was a portfolio manager at Morgan Grenfell, Manufacturers Life and Edinburgh Fund Managers, having begun his career as an investment analyst at Royal London Mutual. He has an MA (Hons) in Economics and Accounting.
John Bailer
John is a member of Newton’s equity income team and is the lead portfolio manager for dividend-focused Large Cap Value strategies. John is responsible for creating the Income Stock strategy to meet demand from clients seeking attractively valued higher dividend income while not sacrificing dividend growth. He is also the lead portfolio manager for the Equity Income strategy, which emphasizes dividend growth stocks, and a senior research analyst on the Dynamic Large Cap Value strategy.
John joined Newton in September 2021, following the integration of Mellon Investments Corporation’s equity and multi-asset capabilities into the Newton Investment Management Group. Before joining Newton, John was a senior portfolio manager and analyst at Mellon Investments Corporation and The Boston Company Asset Management (both BNY Mellon group companies). He has managed dividend strategies for the firm since 2005. Previously, John was Chair of Mellon’s Proxy & Governance committee.
John began his investment career in 1992 and has spent his entire career with BNY Mellon.
John has a BS with distinction in Accounting and Information Management Systems from Babson College and an MS in Finance from Boston College. He received his CFA1 designation in 1997 and is a member of the CFA Institute and the CFA Society Boston.
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The value of investments can fall. Investors may not get back the amount invested. Income from investments may vary and is not guaranteed.
