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 may 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 can provide diversification to any portfolio. Amid the global recovery from the pandemic, they have demonstrated an ability to decouple from the growth stocks, whenever 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 2022
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
Newton offers a range of income solutions to meet investors’ unique mix of yield / risk appetite.
Source: evestment. 10 year data as aof 30 September 2022. 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. 30 September 2022
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 30 September 2022 with years at firm relating to tenure at Newton and / or Mellon Investment Corporation. Source: Newton group of companies, 23 September 2022
Newton's Income Fund Range
The value of investments can fall. Investors may not get back the amount invested.
Resources
Back to the future
Q3 Panel Watch: Global Income
Challenge and Opportunities in Global Equity Income Investing
Historical track record %
YTD 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
Newton Global Equity Income strategy | 11.72 | 15.91 | 3.01 | 22.1 | 0.71 | 8.93 |
FTSE World | -2.3 | 22.07 | 12.74 | 22.79 | -3.09 | 13.34 |
Newton Global Infrastructure Dividend Focus Equity strategy | 1.74 | 16.29 | -12.56 | 21.22 | -6.03 | 17.48 |
S&P Global Infrastructure | 7.33 | 11.05 | -6.49 | 25.75 | -10.37 | 19.07 |
Newton Asian Equity Income strategy | 2.17 | 6.95 | 5.95 | 14.81 | 1.27 | 12.89 |
FTSE Asia Pacific ex-Japan TR | -4.64 | -0.1 | 19.42 | 14.48 | -8.51 | 23.37 |
Newton Income Stock RP | 8.04 | 30.85 | -1.56 | 29.65 | -7.84 | 16.33 |
S&P 500 | -13.1 | 28.71 | 18.4 | 31.46 | -7.84 | 16.33 |
Newton Multi-Asset Income Strategy | 1.3 | 11.53 | 4.07 | 15.61 | -6.11 | 12.12 |
MSCI AC World | -3.35 | 10.73 | 10.53 | 15.46 | -1.98 | 8.65 |
Source: Newton 30 November 2022. 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
