Australia Dynamic Factor Premia

This strategy is offered by Newton Investment Management Ltd (‘NIM’). This strategy may be managed by an affiliate of NIM and may apply a research process that differs from that applied by NIM.

Strategy overview

The strategy seeks to achieve an absolute return (cash plus 6%) with a target volatility of 10% through a multi-strategy approach to global macro, cross-asset trend and cash equity long/short. It is a liquid alternative strategy with a flexible and opportunistic risk budget that targets a low-to-zero correlation with global equities over time, with the potential for a positive return during equity-market corrections. However, a positive return is not guaranteed and a capital loss may occur.

Dynamic Factor Premia can serve as diversifier by aiming to generate an alternative, uncorrelated source of return for investors who need diversification from traditional betas. It may also serve as a core alternative allocation given its diversified, multi-strategy approach.

Strategy profile

Benchmark

FTSE 3 Month US T Bill Index

Strategy inception

18 November 2021

Investment team

Our investment team of research analysts and portfolio managers work together across regions and sectors, helping to ensure that our investment process is highly flexible.

Want to find out more?

Contact us

  • Dimitri Curtil
    Dimitri Curtil

    Global head of multi-asset solutions

  • Keith Lee
    Keith Lee

    Portfolio manager, Asset Allocation Portfolio Management team

  • James H Stavena
    James H Stavena

    Head of portfolio management, Multi-Asset Solutions

  • Torrey K Zaches
    Torrey K Zaches

    Portfolio manager, multi-asset solutions

  • Elaine Zhong
    Elaine Zhong

    Portfolio manager, Asset Allocation Portfolio Management team

Insights

Theme update
Blog

Inflation, debt and rates: The trinity defining markets

We assess the current and potential future impact of inflation, debt and interest rates upon markets.
12 June 2024 Paul Brain
Video

Brainwaves 12: What might upset the ‘Goldilocks’ economic backdrop for markets?

Teaser. We consider the macro indicators that could dampen positive market sentiment later this year.
29 May 2024 Paul Brain, Matt Goodburn
Blog

A powerful investment partnership

How humans and machines can thrive together in a new market regime.
24 May 2024 Dimitri Curtil, Catherine Doyle

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.

Key investment risks

  • Objective/performance risk: There is no guarantee that the strategy will achieve its objectives.
  • Derivatives risk: Derivatives are highly sensitive to changes in the value of the asset from which their value is derived. A small movement in the value of the underlying asset can cause a large movement in the value of the derivative. This can increase the sizes of losses and gains, causing the value of your investment to fluctuate. When using derivatives, the strategy can lose significantly more than the amount it has invested in derivatives.
  • Changes in interest rates & inflation risk: Investments in bonds/money market securities are affected by interest rates and inflation trends which may negatively affect the value of the strategy.
  • Credit ratings and unrated securities risk: Bonds with a low credit rating or unrated bonds have a greater risk of default. These investments may negatively affect the value of the strategy.
  • Credit risk: The issuer of a security held by the strategy may not pay income or repay capital to the strategy when due.
  • Emerging markets risk: Emerging markets have additional risks due to less developed market practices.
  • New strategy liquidity risk: This strategy is not expected to hold investments which would be considered illiquid; however, while the strategy is being established, it is possible that the liquidity profile of the strategy may fluctuate.
  • Volcker Rule risk: The Bank of New York Mellon Corporation or one of its affiliates (‘BNYM’) has invested in the strategy. As a result of restrictions under the ‘Volcker Rule’, which has been adopted by US Regulators, BNYM must reduce its shareholding percentage so that it constitutes less than 25% of the strategy within, generally, three years of the strategy’s establishment (which starts when the strategy’s manager begins making investments for the strategy). Risks may include: BNYM may initially own a proportionately larger percentage of the strategy, and any mandatory reductions may increase strategy portfolio turnover rates, resulting in increased costs, expenses and taxes. Details of BNYM’s investment in the strategy are available upon request.
  • Counterparty risk: The insolvency of any institutions providing services such as custody of assets or acting as a counterparty to derivatives or other contractual arrangements, may expose the strategy to financial loss.