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Mitesh Sheth
Chief Investment Officer, Multi-Asset,
Newton Investment Management.
In a volatile, inflationary, low growth world, we think investors need actively managed, global, sustainable solutions.
Introducing FutureLegacy
FutureLegacy is a range of five risk-targeted multi-asset funds that through the expertise at Newton Investment Management aim to help clients achieve their long-term goals investing for and during their retirement.
Managed to remain within the Dynamic Planner volatility bands 3-7, the BNY Mellon FutureLegacy funds enable advisers to recommend a solution which aims to meet the needs, risk appetite and expectations of their client, identified as part of their advice process.
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Actively managed
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Global & sustainable
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Directly invested
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Investing for all of our futures, creating a powerful legacy
- Solutions providers: Companies that offer structural growth opportunities from providing solutions to environmental or social challenges that are captured by many of Newton’s long-term investment themes, as well as (in some cases) being aligned with the UN Sustainable Development Goals. Examples include food security, renewables, education, pharmaceuticals, green infrastructure, and the circular economy.
- Balance stakeholders: Companies that balance social and environmental issues well to generate sustainable returns and perform to high standards on shared value in their direct operations and supply chains or integrate sustainability priorities into their business strategy.
- Transitions: Companies that have committed explicitly to improving their environmental and social impacts by reducing a negative externality that will lead to a transformation of their business models.
Newton’s sustainable investment framework also includes a number of ‘red lines’, which are built on a combination of exclusions that effectively avoid investments in issuers involved in or associated with areas of activity that Newton deems to be harmful from a social and/or environmental perspective.
Newton’s red lines
Tobacco production
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Corporate issuers that generate any revenues (>0%) from the manufacture of tobacco products.
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Tobacco retail and supporting products
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Corporate issuers that generate more than 10% of revenue from products that support the tobacco industry and/or retail or wholesale tobacco products manufactured by other companies.
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Breaches of the UN Global Compact
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Corporate issuers deemed to have violated one or more principles of the UN Global Compact (UNGC).
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Controversial weapons
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Corporate issuers that are flagged for current or recent involvement in the manufacture of any of the following weapons: anti-personnel mines, cluster munitions, chemical weapons, biological weapons, nuclear weapons, incendiary weapons, non-detectable fragments, blinding laser weapons, white phosphorous weapons, depleted uranium weapons.
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Alcohol production
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Corporate issuers that generate 10% or more of revenues from the manufacture of alcoholic beverages.
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Gambling operations
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Corporate issuers that generate 10% or more of revenues from the owning and/or operation of a gambling venue.
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Adult entertainment production
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Corporate issuers that generate 10% or more of revenues from the production of adult content or the owning and/or operation of adult entertainment venues.
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Thermal coal extraction
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Corporate issuers that generate 10% or more of revenues from the extraction of thermal coal.
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Source: Newton as at 14 March 2024. Please note, some strategies following Newton’s sustainable investment process may choose to add to these exclusions – but may never subtract.
Sovereign debt positions are evaluated prior to purchase for eligibility against Newton’s sustainable sovereign bond matrix, which seeks to excludes poor performers across a series of qualitative and quantitative data points.
Newton will make investment decisions that are not based solely on ESG. Other attributes of an investment may outweigh ESG analysis when making investment decisions. The way that ESG and sustainability is assessed and the assessment of their suitability for Newton's sustainable strategies may vary depending on the asset class and strategy involved. For Newton’s sustainable strategies, ESG analysis is performed prior to investment for corporate investments (single name equity and fixed income securities). The analysis will then also follow the Newton sustainable investment process to ensure it fits with the wider Newton sustainable investment philosophy. The determination of whether a security meets Newton's sustainability criteria is carried out by the portfolio manager’s research analysts of the sustainable fund range. Equity portion of strategies only. Please note that Newton’s sustainable framework does not currently include the review or analysis of derivatives.
Analysis of themes may vary depending on the type of security, investment rationale and investment strategy. Newton will make investment decisions that are not based on themes and may conclude that other attributes of an investment outweigh the thematic structure the security has been assigned to.
Key investment risks:
- Objective/Performance Risk: There is no guarantee that the Funds will achieve their objectives.
- Currency Risk: These Funds invest in international markets which means they are exposed to changes in currency rates which could affect the value of the Funds.
- 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 Funds can lose significantly more than the amount they have invested in derivatives.
- Changes in Interest Rates & Inflation Risk: Investments in bonds/money market securities are affected by interest rates and inflation trends which may negatively affect the value of the Funds.
- Credit Ratings and Unrated Securities Risk: Bonds with a low credit rating or unrated bonds have a greater risk of default. These investments may negatively affect the value of the Funds.
- Credit Risk: The issuer of a security held by the Funds may not pay income or repay capital to the Funds when due.
- Emerging Markets Risk: Emerging Markets have additional risks due to less-developed market practices.
- Shanghai-Hong Kong Stock Connect and/or the Shenzhen-Hong Kong Stock Connect (“Stock Connect”) risk: The Funds may invest in China A shares through Stock Connect programmes. These may be subject to regulatory changes and quota limitations. An operational constraint such as a suspension in trading could negatively affect the Funds’ ability to achieve their investment objectives.
- Volcker Rule Risk: The Bank of New York Mellon Corporation or one of its affiliates (“BNYM”) has invested in these Funds. As a result of restrictions under the “Volcker Rule,” which has been adopted by U.S. Regulators, BNYM must reduce its shareholding percentage so that it constitutes less than 25% of the Funds within, generally, three years of the Funds’ establishment (which starts when the Funds’ manager begins making investments for the Funds). Risks may include: BNYM may initially own a proportionately larger percentage of the Funds, and any mandatory reductions may increase Fund portfolio turnover rates, resulting in increased costs, expenses and taxes. Details of BNYM’s investment in the Funds are available upon request.
- CoCo’s Risk: Contingent Convertible Securities (CoCo’s) convert from debt to equity when the issuer’s capital drops below a pre-defined level. This may result in the security converting into equities at a discounted share price, the value of the security being written down, temporarily or permanently, and/or coupon payments ceasing or being deferred.
- Sustainable Funds Risk: The Funds follow a sustainable investment approach, which may cause them to perform differently than funds that have a similar objective but which do not integrate sustainable investment criteria when selecting securities. The Funds will not engage in stock lending activities and, therefore, may forego any additional returns that may be produced through such activities.
- Investment in Infrastructure Companies Risk: The value of investments in Infrastructure Companies may be negatively impacted by changes in the regulatory, economic or political environment in which they operate.
- 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 Funds to financial loss.
The value of investments can fall. Investors may not get back the amount invested. Income from investments may vary and is not guaranteed.
Newton FutureLegacy Investment Team:
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
1 Newton’s global AUM is adjusted lower to factor in any double counting of affiliate fund or fund-of-fund assets which can occur when a Newton multi-asset strategy invests in a BNY Mellon fund, that is sub-advised by Newton. At end December 2023, total assets invested by Newton multi-asset strategies on this basis was £2.6bn. To avoid double counting we extract these assets from Newton’s global AUM, which results in a total global AUM of £83.9bn for Newton. Mixed Assets and Charities team assets of £11.5bn includes £1.6bn of this form of double-counted assets. Multi-Asset Solutions team assets of £14.0bn includes £1.1bn of this form of double-counted assets.
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).
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1938704 Expiry: 31 December 2024