Designed for institutional and retail investors, including charity clients, the Newton Sustainable Sterling Bond Fund is co-managed by Howard Cunningham and Scott Freedman. It follows the launch of the Newton Sustainable Real Return Fund in April 2018, and the Newton Sustainable Global Equity Fund in January 2018.
The objective of the fund is to achieve capital growth and income through investment predominantly in fixed interest securities that are denominated in Sterling or hedged back to Sterling. The Fund aims to achieve its objective through investing in government and public securities and fixed interest securities of companies that demonstrate attractive investment attributes and sustainable business practices. More than 35 per cent of assets may be invested in gilts and up to 50 per cent of assets in sub-investment grade fixed income securities.
Every holding in the fund is subject to an ESG quality review.
Companies that Newton IM considers are not aligned with the UN Global Compact Principles or the principles of a ‘2-degree’ world are filtered out, while the fund will invest in in companies the manager considers positively manage the material impacts of their operations and products on the environment and society.
The fund also avoidscompanies that Newton IM considers have material and unresolvable ESG-related risks, which are likely to negatively impact future performance. Newton’s responsible investment team can veto securities based on ESG factors.
Therewill be direct investment in any company that derives more than 10 per cent of its turnover from the production and sale of tobacco.
The fund is part of the BNY Mellon Investment Funds range. Newton manages £2.6 billion on a sustainable or ethical basis.
Newton IM chief commercial officer Julian Lyne says:“Our approach to sustainable investing, which has been core to Newton since we launched 40 years ago, stems from our belief that companies that operate in a sustainable manner and optimise their resources will ultimately benefit shareholders and bondholders over the long term.
“The fund complements our recently expanded sustainable range. With this new fund, and throughout the sustainable range, we use ESG analysis to positively identify companies with robust business models which effectively incorporate sustainability into their core business and strategy. This investment philosophy ensures we provide our clients with exposure to high-quality sustainable securities with strong long-term investment opportunities.”