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.
  • Environmental, social and governance (ESG) considerations are integrated throughout the research process 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

Machines and networks are becoming more intelligent. This is disrupting the labour market, as machines increasingly replace humans in the workplace. ‘Smart revolution’ considers the implications commercially, socially and politically.

State intervention

Authorities have engaged in ever-greater policy intervention and regulation to shore up economic growth. We believe ‘state intervention’ has increased misallocation of capital, caused volatility in markets and inflated asset prices – and we think that calls for a stock-specific approach.

Financialisation

Cheap money has caused rapid growth in a sector already supported by deregulation. ‘Financialisation’ investigates the implications of finance dominating economic activity, instead of serving it.

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.

19
years’ average investment experience
13
years’ average time at Newton

Strategy profile

Objective

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

Performance benchmark

The strategy aims to deliver a minimum return of SONIA (30-day compounded) +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.

* Please note that on 1 October 2021, the performance benchmark for this strategy changed from 1-month GBP LIBOR +4% to SONIA (30-day compounded) +4%.

Literature

Application form
Key Investor Information Document (KIID)
Prospectus
BNY Mellon Real Return Fund factsheet

Fund factsheet

Information on performance and positioning.


RI report Real return

Responsible investment report

Stewardship activities (voting and engagement) for the last quarter and ESG metrics.


Retail Real Return Brochure

Brochure

More detail on the strategy’s investment brochure

Quarterly video update: Q2 2021

Quarterly video update

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 may 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.