The Russian attack on Ukraine has shaken the world and united many to widely condemn these actions, the human cost of which is horrifying. The commencement of war in Europe today is hard to comprehend and our immediate concern is the humanitarian impact on those directly affected by this terrible event.
In addition to matching employee contributions through our Community Impact Program, as part of BNY Mellon we are contributing funds to several non-governmental organizations to further their life-saving humanitarian work. Given the speed with which events are unfolding, we will continue to monitor the situation to determine the best way to deploy resources to meet the growing and changing needs of Ukraine and the region, including Poland.
Naturally, the attack has far-reaching implications for global markets. While tensions between Russia and Ukraine had clearly been building over recent months, the nature and severity of the invasion has taken politicians and financial markets by surprise and has resulted in a drawdown in risk assets.
In such situations, our focus is on our normal process of constantly re-evaluating portfolios and trying to ensure that we can continue to create meaningful progress for our clients in the light of the new circumstances that we face.
The constant monitoring of potential risks is an essential part of how we manage our investments, and we continue to watch developments very closely given the changing dynamics and resultant market volatility. As always, we think it is important to avoid getting swept up in the turbulence of short-term events and think carefully about the longer-term implications for areas such as commodity prices, the energy complex more broadly, and the interplay between major world powers on the geopolitical stage. Most importantly, we must consider which asset classes and companies are likely to weather this period of turbulence intact or indeed come out of it even stronger.
As a firm we have historically had low exposure to Russian investments, as our fundamental research process, which incorporates ESG analysis (where applicable and as appropriate), has highlighted concerns in relation to political stability, the rule of law and control of corruption, and has directed us to what we believe to be better opportunities elsewhere. The vast majority of our investment strategies came into this period with no exposure to Russian securities, and those strategies which do have some exposure (mainly emerging-market portfolios) only own small positions in a very limited number of securities. Our strategies have no exposure to Belarusian securities, and we have no plans to purchase further Russian or Belarusian securities at this time.
We will continue to evaluate and actively engage with non-Russian holdings with exposure to the region as part of our ESG research and activity, and we will take appropriate action on a case-by-case basis.
We are deeply aware of the importance of what our industry is being asked to do by governments to support their efforts to restore peace. Together with BNY Mellon, we continue to monitor and assess actual or possible future actions taken by global governments and official bodies, and any potential impacts on our clients and their portfolios. Any actions required by us or our clients in response to recently imposed or future sanctions will be carefully assessed and implemented in line with those protocols.
We also remain vigilant and guarded against any increased risk of cybersecurity incidents. We have multiple levels of technology threat protection in place and proactively assess the threat landscape to protect the company and our clients.
At the current time, our foremost thoughts are with the people of Ukraine and all those who are being affected by the current tragic events. We will be regularly updating our website with comment and analysis from our investment experts about the market implications of the events unfolding in Russia and Ukraine. If you have any concerns or questions, please do not hesitate to contact us via the usual channels.
Newton’ and/or ‘Newton Investment Management’ is a corporate brand which refers to the following group of affiliated companies: Newton Investment Management Limited (NIM) and Newton Investment Management North America LLC (NIMNA). NIMNA was established in 2021 and is comprised of the equity and multi-asset teams from an affiliate, Mellon Investments Corporation. In the United Kingdom, NIM is authorised and regulated by the Financial Conduct Authority (‘FCA’), 12 Endeavour Square, London, E20 1JN, in the conduct of investment business. Registered in England no. 01371973. NIM and NIMNA are both registered as investment advisors with the Securities & Exchange Commission (‘SEC’) to offer investment advisory services in the United States. NIM’s investment business in the United States is described in Form ADV, Part 1 and 2, which can be obtained from the SEC.gov website or obtained upon request. Both firms are indirect subsidiaries of The Bank of New York Mellon Corporation (‘BNY Mellon’).
Newton provides discretionary and non-discretionary investment advice to institutional clients, including US and global pension funds, sovereign wealth funds, central banks, endowments, foundations, insurance companies, registered mutual funds, other pooled investment vehicles and other institutions. Its current office locations include London, Boston, New York and San Francisco.
The Newton Group manages a variety of investment strategies. Whether and how ESG considerations are assessed or integrated into Newton’s strategies depends on the asset classes and/or the particular strategy involved, as well as the research and investment approach of each Newton firm. ESG may not be considered for each individual investment and, where ESG is considered, other attributes of an investment may outweigh ESG considerations when making investment decisions. Newton will make investment decisions that are not based solely on ESG considerations. The way that ESG considerations are assessed may vary depending on the asset class and strategy involved.
This material may not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or not authorised. Certain information contained herein is based on outside sources believed to be reliable, but their accuracy is not guaranteed. The opinions expressed in this material are those of Newton and should not be construed as investment advice.
This material is provided for general information only and should not be construed as investment advice or a recommendation. You should consult with your advisor to determine whether any particular investment product or strategy is appropriate.
Personnel of certain of our BNY Mellon affiliates may act as: (i) registered representatives of BNY Mellon Securities Corporation (in its capacity as a registered broker-dealer) to offer securities, (ii) officers of the Bank of New York Mellon (a New York chartered bank) to offer bank-maintained collective investment funds and (iii) associated persons of BNYMSC (in its capacity as a registered investment adviser) to offer separately managed accounts managed by BNY Mellon Investment Management firms.