This week I am looking at the Newton Global Equity Income Fund, a fund that aims to generate a sustainable and growing income through dividend returns, as well as capital growth for its investors.
The fund has a global mandate but focuses primarily on developed markets, typically concentrating on large and medium sized companies above $10bn in market capitalisation. As with all of Newton’s funds, their investment philosophy is based upon “conviction in that no company, market or economy can be considered in isolation; each must be understood in a global context”. They believe that their understanding of global trends and themes gives them an advantage in generating long-term investment returns.
As a fund house, Newton has defined nine global investment themes that they believe provide the greatest investment opportunities. Key themes are: Earth Matters; Smart Revolution; and Consumer Power. Newton’s analysts look to find listed companies which will benefit from these themes and then present these ideas to the Global Equity Income team. The team review these best ideas and then conduct their own research to see if the investment is suitable to be added to the portfolio.
The final decision on stock selection and weightings is made by lead manager, Nick Clay, who has been running this strategy since 2015. Nick has 27 years of investment management experience, having previously worked at Sun Alliance Investment Management and Morley Fund Managers. Nick joined Newton in 2000 and the Global Equity Income team in 2012.
Nick and his team have developed a strict investment process that looks to find companies yielding higher than their FTSE World benchmark, 2.5% at time of writing, with strong cash flow, high return on invested capital and are trading at an attractive valuation