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 2022:
1
Income prospects look attractive versus other income alternatives: dividends provide better inflation protection, and they are often more sustainable owing to many companies lowering payout ratios.
2
Income stocks remain cheap compared to the overall market and growth stocks, despite the strong comeback in dividends that we have seen in 2021. Elevated valuations and more nomalised earnings expectations should move the market focus back to dividends: a higher percentage of total return could come from dividends.
3
Income stocks provide diversification to any portfolio. During the recovery they have demonstrated an ability to decouple from the growth stocks which have broadly driven markets, whenever those growth stocks have come under pressure.
We have seen in 2021 that periods of higher inflationary and interest-rate fears favour income stocks as the valuation of growth stocks come under pressure
$12+ billion in
100+ clients worldwide
100+ clients worldwide
100+ clients worldwide
100+ clients worldwide
Dividend prospects to remain bright in 2022
The dividend recovery in 2021 was fuelled by a strong above-trend cyclical earnings recovery; in 2022, we would expect earnings and dividend growth to remain healthy but revert to more normal historic levels.
Dividend sustainability has improved through the crisis
The continuing dividend recovery is further supported by the fact that many companies have taken a cautious stance throughout the pandemic, reducing payout ratios by distributing a lower percentage of their earnings to shareholders; dividend growth has therefore lagged the earnings recovery. This provides an extra buffer for any potential future economic slowdown, and means that the probability of companies having to cut their dividends has decreased.
Shift in the macro environment more favourable for income stocks
Impact dividends, United States, 1900-2019
For illustrative purposes only.
Source: Prof Robert Shiller, Yale University, August 2020.
Newton's Income Solutions
Newton offers a range of income solutions to meet investors’ unique mix of yield / risk appetite.
Source: evestment. 10 year data as of December 31 2021. 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.Â
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Why Newton for Income Solutions
focus
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
Newton's Income Fund Range
The value of investments can fall. Investors may not get back the amount invested.
Resources
Infrastructure income – key stats and drivers
Asian Income – key stats and drivers
Income investing for the times we are living in
Play it safe, buy cheaply?
Academic support for equity income
Avoiding the crowd to find dividends in Asia
Historical track record %
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 |
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.
Source: Newton 31 December 2021. 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 US Equity Income representative portfolio 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.
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. 945251
