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Welcome to Funds in the Spotlight 2
Following on from our first 'Funds in the Spotlight' email please find below the second in the series, looking at the Newton Global Higher Income fund.
With the range of collective investment funds based in the UK on offer to investors running to over 2200, it is hardly surprising that a large proportion fail to consistently exceed their performance benchmark.
To help ensure your money is working hard for you we invest a lot of time and energy in first class independent research to filter this list down to a manageable range of top quality funds. The Newton Global Higher Income fund along with all others mentioned in this series appears on our buy list and its fund manager has been asked to provide a bit more of an insight into the fund for you. It may be that you don’t hold this particular fund but ones you do hold will make an appearance in the series over the next few weeks. Watch this space!
The text within this email will also feature on our blog section on our website. Of course, if you'd rather not receive Funds in the Spotlight, please let us know by replying to this mail, with 'No Thanks' in the subject line.
Newton Global Higher Income Fund
The objective of the Fund is to achieve increasing annual distributions together with long-term capital growth through a portfolio of typically between 80-120 international stocks. The Fund may also invest in collective investment schemes.
The Fund Manager, James Harries holds a masters degree in finance from the London Business School and is currently a Director of Investment Management (Global Equities). The fund is well rated by a number of external research companies.
The Newton Global Higher Income Fund offers UK investors a genuine opportunity to diversify their income investments into global markets, making it less reliant on the UK, or any single economy. Please remember that dividend income is not guaranteed and may fall as well as rise due to stock and currency movements.
Stock selection and asset allocation in the Fund are driven by Newton’s thematic research process, but as in other Newton-managed equity income funds, all prospective holdings are subject to a strict yield criteria. For inclusion in the portfolio any stock under consideration must have a prospective yield 25% greater than the FTSE World Index. When the prospective yield of any holding falls to a market level, the Fund’s sell discipline triggers its sale. While this approach enables the Fund to participate fully in continued global growth, its emphasis on dividend income provides a degree of downside protection during periods of poor returns.
It is worth noting that steadily growing dividends, rather than the historic yield may serve as a better indicator of the actual health of the underlying investment. This is reflected in their stock selection process – they believe it is important to invest in well-managed companies with strong balance sheets (which tend to be good indicators of a company’s ability to pay dividends), rather than just looking at the yield, which may or may not be a sign of quality.
Risk warnings
Unit prices can fall as well as rise, and past performance is no guarantee of future returns.
Piers Larcombe
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