LONDON and NEW YORK , July 28 /PRNewswire-FirstCall/ -- Newton* has unveiled four new themes set to drive future trends and subsequent stock selection.
Newton uses a dynamic framework of long-term themes to help develop an understanding of how the world is changing and where investment opportunities are likely to appear. The company believes the credit crisis marked an important turning point for financial institutions, companies and investors globally, with the four new investment themes being; 'All Change', 'Uneconomic Growth', 'More Government' and 'Construction and Reconstruction'.
Iain Stewart , a Director of Investment at Newton and the driver of the Newton thematic investment process created over 20 years ago, said: "As the credit crisis has well and truly hit, our attention has turned to the long-term implications of the crisis for investors. Our all change theme forces us to think about a world in which credit is no longer cheap and abundant. That this also appears to be the case for both food and energy makes the transition all the more profound.
"Against this backdrop of tighter credit conditions, we have favoured stable growth businesses which are capable of generating cash throughout an economic cycle. We have been avoiding companies which have relied upon the unsustainable growth of cheap credit such as many western banks, investment banks and real estate businesses."
The uneconomic growth theme relates to how global economic activity and inflation measures are distorted by currency pegs, price controls and subsidies. Newton believes some supply chain arrangements, such as outsourcing to China , could come under pressure. This could favour local manufacturers that operate closer to the consumer.
The construction and reconstruction theme highlights the 'megatrend' in global infrastructure. While spending on global infrastructure including transport, telecoms and utilities has grown rapidly over the past few years, Newton believes infrastructure spending in less-developed economies continues to be a solid growth area in a world experiencing a cyclical slowdown.
The more government theme is based on the premise that the recent financial crisis will lead to more government intervention. Newton believes this form of managed capitalism will have a detrimental effect on global trade and corporate profits. Domestic based 'consumer champions', along with companies operating in the security, surveillance, aerospace and defence sectors are expected to benefit.
Two of Newton's themes 'debt and credit' and 'becalmed' which contributed to strong performance relative to benchmarks in international equity (EAFE Plus), global equity and global bonds during the credit crisis of 2007, have been removed and updated with the four new themes**.
In 1998, Newton was acquired by Mellon Financial Corporation, which merged
with Bank of New York Company, Inc., to become The Bank of New York Mellon in
July last year. Newton today forms part of the
The Bank of New York Mellon Corporation is a global financial services
company focused on helping clients manage and service their financial assets,
operating in 34 countries and serving more than 100 markets. The company is a
leading provider of financial services for institutions, corporations and
high-net-worth individuals, providing superior asset management and wealth
management, asset servicing, issuer services, clearing services and treasury
services through a worldwide client-focused team. It has
'Newton' refers to the following group of affiliated companies: Newton Investment Management Limited, Newton Capital Management Limited, Newton International Investment Management Limited, Newton Capital Management LLC and Newton Fund Managers (CI) Limited. Assets under management include assets managed by all of these companies except Newton Capital Management LLC, which provides marketing services in the U.S. for Newton Capital Management Limited. Except for Newton Capital Management LLC and Newton Capital Management Limited, none of the other Newton companies offer services in the U.S. Newton Capital Management Limited is an investment management firm, authorized and regulated in the UK by the Financial Services Authority in the conduct of investment business and is a wholly owned subsidiary of The Bank of New York Mellon Corporation. Registered in England no. 2675952. Newton Capital Management Limited is registered as an investment adviser under the Investment Advisers Act of 1940.
Newton has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS(R)). For each of the years from 1996 to 2005, Newton has been verified by an independent verifier. Copies of the verification reports are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results and a complete list and description of Composites is also available by contacting Ciaran Spillane (516) 338 3521. Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Non-feepaying accounts are not included in this Composite. Capital gains, dividend and interest received may be subject to withholding tax imposed by the country of origin and such taxes may not be recoverable.
The U.S. Dollar is the currency used to express performance. Returns include the effect of foreign currency exchange rates. Further information regarding the exchange rates used is available upon request. Returns are presented gross and net of management fees and include the reinvestment of all income. Actual returns will be reduced by investment advisory fees and other expenses that may be incurred in the management of the account. The FTSE World and JP Morgan Global Government Bond indices used for comparative purposes are calculated gross of withholding taxes. The MSCI World and MSCI EAFE indices used for comparative purposes are calculated net of withholding taxes.
Past performance is not a guide to future returns. The value of investments and the income from them can fall as well as rise and investors may not get back the original amount invested. The value of overseas securities will be influenced by fluctuations in exchange rates. If part of the portfolio is invested in sub-investment grade bonds, which typically have a low credit rating and carry a high degree of default risk, then please be aware that this can affect the capital value of your investment. If the portfolio has exposure to hedge funds, gold, private equity and property via publicly quoted transferable securities, then there are additional risks associated with these sectors. The information contained within this document should not be construed as a recommendation to buy or sell a security. It should not be assumed that a security has been - or will be - profitable. There is no assurance that a security will remain in the portfolio.
Newton International Equities (EAFE plus) Strategy Total Firm Composite Assets Year Assets U.S. Dollars % of Firm Assets End (millions) (millions) 2007 78,698 699 Less than 1% 2006 69,694 439 Less than 1% 2005 49,370 116 Less than 1% 2004 41,737 100 Less than 1% 2003 37,824 108 Less than 1% 2002 30,039 62 Less than 1% 2001 30,993 134 Less than 1% 2000 33,101 16 Less than 1% 1999 29,662 19 Less than 1% 1998 21,995 7 Less than 1% Annual Performance Results Year Number of Gross Net MSCI Composite End Accounts Composite Composite EAFE Dispersion NDR 2007 Five or 18.7 % 17.9 % 11.2 % N.A. fewer 2006 Five or 23.6 % 22.7 % 26.4 % N.A. fewer 2005 Five or 15.2 % 14.4 % 13.5 % N.A. fewer 2004 Five or 25.8 % 24.9 % 20.2 % N.A. fewer 2003 Five or 44.0 % 43.0 % 38.6 % N.A. fewer 2002 Five or (14.3)% (14.9)% (15.9)% N.A. fewer 2001 Five or (19.4)% (20.0)% (21.4)% N.A. fewer 2000 Five or (14.2)% (14.8)% (14.2)% N.A. fewer 1999 Five or 50.0 % 49.0 % 27.0 % N.A. fewer 1998 Five or 25.5 % 24.6 % 20.0 % N.A. fewer Newton EAFE (Global Equity ex U.S.) Plus Composite contains fully
discretionary segregated portfolios that invest in global equity markets with
the exception of North America and for comparison purposes is measured against
the MSCI EAFE Index. The MSCI EAFE Index is a free float-adjusted market
capitalization index that is designed to measure global developed market
equity performance, excluding the US & Canada . This Composite comprises
portfolios that invest in global equities including emerging markets, which
may include stocks that do not form part of the benchmark. Actual returns
will be reduced by investment advisory fees and other expenses that may be
incurred in the management of the account. The fee schedule appropriate for
this presentation starts at 0.30% per annum subject to a minimum of
Newton Global Bond Unhedged Composite contains fully discretionary
portfolios which invest in international government debt and for comparison
purposes is measured against the JP Morgan Global Government Bond Index. The
JPM Global Government Bond Index is a market capitalization weighted index
that is designed to measure global bond market performance. Actual returns
will be reduced by investment advisory frees and other expense that may be
incurred in the management of the account. The fee schedule appropriate for
this presentation starts at 0.15% per annum subject to a minimum of
Newton Global Equity Institutional Composite contains fully discretionary
equity portfolios that invest in global equities including emerging markets,
which may include stocks that do not form part of the benchmark and for
comparison purposes is measured against the FTSE World and MSCI World indices.
The FTSE World and MSCI World Index are free float-adjusted market
capitalization indices that are designed to measure global developed market
equity performance. Actual returns will be reduced by investment advisory
fees and other expenses that may be incurred in the management of the account.
The fee schedule appropriate for this presentation starts at 0.30% per annum
subject to a minimum of
Newton Global Higher Income Composite contains fully discretionary
portfolios that invest in global equities which have a yield greater than 15%
of the local market, and for comparison purposes is measured against the FTSE
World and MSCI World indices. The FTSE World and MSCI World Index are free
float-adjusted market capitalization indices that are designed to measure
global developed market equity performance. This Composite comprises
portfolios that invest in global equities including emerging markets, which
may include stocks that do not form part of the benchmark. Actual returns
will be reduced by investment advisory fees and other expenses that may be
incurred in the management of the account. The fee schedule appropriate for
this presentation starts at 0.30% per annum subject to a minimum of
Newton Global Opportunities Composite contains fully discretionary
portfolios that invest in global equity markets but are not constrained by
investment restrictions and for comparison purposes is measured against the
FTSE All World & MSCI AC World indices The FTSE World and MSCI World Index are
free float-adjusted market capitalization indices that are designed to measure
global developed market equity performance. This Composite comprises
portfolios that invest in global equities including emerging markets, which
may include stocks that do not form part of the benchmark. Actual returns
will be reduced by investment advisory fees and other expenses that may be
incurred in the management of the account. The fee schedule appropriate for
this presentation starts at 0.35% per annum subject to a minimum of
*'Newton' refers to the following group of affiliated companies: Newton Investment Management Limited, Newton Capital Management Limited, Newton International Investment Management Limited, Newton Capital Management LLC and Newton Fund Managers (C.I.) Limited. Assets under management include assets managed by all of these companies except Newton Capital Management LLC, which provides marketing services in the U.S.. Except for Newton Capital Management LLC and Newton Capital Management Limited, none of the other Newton companies offer services in the U.S.. Newton Capital Management Limited is an investment management firm, authorized and regulated in the UK by the Financial Services Authority in the conduct of investment business and is a wholly owned subsidiary of The Bank of New York Mellon Corporation. Registered in England no. 2675952.
SOURCE The Bank of New York Mellon Corporation
