UK Lgps Future Earth

Strategy highlights

  • Enables investors to gain targeted exposure to companies worldwide which offer innovative solutions to help address environmental challenges
  • Long-term thematic approach identifies drivers of change, providing a framework for idea generation
  • Stock selection driven by bottom-up proprietary research which incorporates consideration of environmental, social and governance (ESG) risks, issues and opportunities

Our philosophy and process

We have been considering themes as a key part of our investment process since our inception in 1978. Themes seek to identify the major areas of structural change in the world. This structural change can be political, economic, social, technological, or environmental; its impact will manifest across traditional economic sectors, and will be significant in magnitude and long-term in duration. Themes are a critical element of our idea-generation process and, alongside evaluation of fundamentals and ESG considerations, constitute a key component of our valuation of securities.

For the Future Earth strategy, a significant area of structural change is environmental change. We seek to identify companies that are proactively contributing to an overall shift towards an operating model that will help protect the Earth’s environment and natural resources.

  • Future Earth Strategy

Investment team

Our Future Earth strategy is managed by a team with a wide range of backgrounds and varied experience. Our investment team of research analysts and portfolio managers works together across regions and sectors, helping to ensure that our investment process is highly flexible. Guided by our global investment themes, we seek to identify opportunities and risks through research and debate.

Strategy profile

Objective

The strategy aims to achieve long-term capital growth and has a sustainable investment objective. Specifically, it aims to contribute to an environmental objective by investing in securities of companies located worldwide which provide products, services and solutions that reduce environmental and natural resource pressures on our Earth.

Performance benchmark

MSCI AC World NDR

Strategy inception

January 2021

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.

ESG analysis may vary depending on the type of security, investment rationale and investment strategy. Newton does not currently view certain types of investments as presenting ESG risks, opportunities and/or issues, and believes it is not practicable to evaluate such risks, opportunities and/or issues for certain other investments. In addition, Newton will make investment decisions that are not based solely on ESG considerations. In some cases, therefore, Newton may conclude that other attributes of an investment outweigh ESG considerations when making investment decisions.

Key investment risks

  • Objective/performance risk: There is no guarantee that the strategy will achieve its objectives.
  • Currency risk: This strategy invests in international markets which means it is exposed to changes in currency rates which could affect the value of the strategy.
  • 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.
  • 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.
  • Shanghai-Hong Kong Stock Connect and/or the Shenzhen-Hong Kong Stock Connect (‘Stock Connect’) Risk: The strategy may invest in China A shares through Stock Connect programmes. These may be subject to regulatory changes and quota limitations. An operational constraint such as a suspension in trading could negatively affect the strategy’s ability to achieve its investment objective.
  • Environmental, social and governance (ESG) investment approach risk: This strategy can be considered to follow an ESG investment approach or incorporate elements of an ESG investment approach, which may cause it to perform differently than other strategies that have a similar objective but which do not integrate an ESG investment approach (or elements thereof) when selecting securities. In addition, in following an ESG investment approach, the strategy is dependent upon information and data from third parties (which may include providers for research reports, screenings, ratings and/or analysis such as index providers and consultants). Such information or data may be incomplete, inaccurate or inconsistent.
  • 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.