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Objective

To generate attractive and consistent real returns for investors, with volatility expected to be between that of bonds and equities over the long term.

Philosophy and process

Our investment philosophy is based upon our conviction that no company, market or economy can be considered in isolation; each must be understood in a global context. We believe that events occurring around the world influence all financial markets and therefore successful investment in internationally diversified securities requires a thorough understanding of the world as a whole.

We identify themes which encompass the major areas of change in the world and we use these themes as the basis of our investment ideas. Our global, thematic approach allows us to gain long-term perspective on global financial markets and economies and always to consider the ‘big picture’. Perspective is a defining feature of our investment process; it helps us to anticipate how the world will change and it directs analysts and portfolio managers towards profitable opportunities.

The multi-asset targeted return strategy is an actively managed multi-asset strategy, investing predominantly in ‘conventional’ assets, with the use of derivatives to protect capital or to generate income. Our multi-asset targeted return portfolios are constructed holistically and follow an unconstrained investment approach, with no regional, sector or indices constraints. We customise the investment characteristics that we seek to the changes we see in the investing environment.

Strategy profile

Performance reference: One-month UK LIBOR
Target: Cash +4% p.a.
Performance aim: One-month UK LIBOR +4% p.a. over 5-year periods, with a positive absolute return on a rolling 3-year basis
Volatility: Expected to be between that of bonds and equities over the long term
Strategy AUM: AUD$25.4bn (as at 30 June 2018)
Strategy inception: Composite inception: 1 April 2004
Representative portfolio (Newton Real Return Strategy) inception: 1 April 2004

Distinguishing features

  • Conviction-based strategy with no regional, sector or indices constraints
  • A constantly evolving and forward-looking approach that anticipates change and identifies opportunities
  • Benefits from a broad perspective owing to our global, thematic outlook and our single location
  • Aims to deliver consistently strong absolute returns irrespective of the performance of peer-groups or indices
  • Invests predominantly in ‘conventional’ asset classes and uses derivatives to protect capital or generate additional income

Past performance is not a guide to future performance. Your capital may be at risk. 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 strategy aims to deliver a minimum return of cash (one-month UK LIBOR) +4% per annum over 5 years before fees. In doing so, the strategy aims to achieve a positive return on a rolling 3-year basis.

Key investment risks

  • The performance aim is not a guarantee, may not be achieved and a capital loss may occur. Strategies which have a higher performance aim generally take more risk to achieve this and so have a greater potential for the returns to be significantly different than expected.
  • This strategy invests in international markets which means it is exposed to changes in currency rates which could affect the value of the strategy.
  • The strategy will use derivatives to generate returns as well as to reduce costs and/or the overall risk of the strategy. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment.
  • Investments in bonds are affected by interest rates and inflation trends which may affect the value of the strategy.
  • The strategy holds bonds with a low credit rating that have a greater risk of default. These investments may affect the value of the strategy.
  • The strategy may invest in emerging markets. These markets have additional risks due to less developed market practices.
  • The strategy may invest in investments that are not traded regularly and are therefore subject to greater fluctuations in price.