Our philosophy and process

  • The strategy is conviction-based, with no regional, sector or performance reference constraints. A constantly evolving and forward-looking approach seeks to anticipate change, manage risk, and identify opportunities.
  • The strategy has a simple structure, with a stable core of predominantly traditional return-seeking assets, and a layer of risk-offsetting positions which aim to dampen volatility and preserve capital. ESG considerations are integrated throughout the research process and via proprietary quality reviews, to ensure that any material issues are captured.

Every time we consider a security or look at an industry or country, it’s in the context of what’s happening across the world. We believe the investment landscape is shaped over the long term by some key trends, and we use a range of global investment themes to capture these.

Smart revolution State intervention Financialisation


The investment landscape looks challenging. We think policies being pursued may be making economies and markets more fragile. So what should you do as an investor? One solution could be our Real Return strategy.

You can imagine the portfolio like this:
– At the core, the emphasis is on traditional assets to generate capital growth and drive long-term returns.
– Then there is an outer layer – stabilising assets and hedging positions to try to counteract risks and dampen volatility.

And this is how we construct it:
– In the core, might be equities, infrastructure and renewables.
– In the outer layer we use a diverse range of instruments, including commodities, bonds, simple derivative strategies and currencies.

We alter the proportions of the core and outer layer according to our evolving view on the investment landscape.

We think there’s a key advantage to active management. We can seek out returns in rising markets and try to minimise the downfall in falling markets.

Its composition is guided by the perspective of our global investment themes. They are our interpretation of the forces driving long-term change in the world.

Our Real Return strategy takes a simple, transparent approach to try to deliver, solid, stable returns for our clients.

Investment team

Our Real Return strategy is managed by an experienced team with a wide range of backgrounds. Our global sector analysts and investment managers are located on a single floor in London, which helps to ensure that the investment process is flexible and opportunistic. Guided by our global investment themes, the team works together to identify opportunities and risks through research and debate.

years' average investment experience
years' average time at Newton

Strategy profile


The strategy has an absolute-return style performance aim, while seeking to preserve capital, through security selection, diversification and simple hedging strategies

Performance aim:

The strategy aims to deliver a minimum return of cash (one-month sterling 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. However, a positive return is not guaranteed and a capital loss may occur.


Expected to be between that of bonds and equities over the long term

Strategy size:

A$22.0bn (as at 30 June 2020), including GBP, EUR, USD and AUD strategies

Strategy inception:

Composite inception: 1 April 2004
AUS Real return brochure


More detail on the strategy's investment approach.

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



  • 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.