Concentrated Global Emerging Markets

Strategy Highlights

: Stock selection driven by bottom-up proprietary research which incorporates environmental, social and governance (ESG) analysis

Long-term thematic approach to investing targets future profitability rather than historic profitability

Focus on ‘compounders’ aims to limit downside risk when markets become less certain
: This strategy is offered by Newton Investment Management Ltd (‘NIM’). NIM is part of the Newton Investment Management Group.

Our Philosophy and Process

The strategy seeks to invest in companies that are well governed and run for the benefit of all shareholders. It can also invest a proportion of assets in developed-market companies where business is driven by emerging-market operations.

Material and relevant ESG risks, issues and opportunities are considered as part of the investment research process.

The strategy has a long-term investment horizon. It focuses on balance-sheet strength and return-on-capital metrics.

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 themes to help identify opportunities.

Strategy Profile

Objective: The strategy seeks to outperform the MSCI Emerging Markets Index (NDR) by more than 3% per annum over rolling 5-year periods, by achieving long-term capital growth from a portfolio comprised predominantly of emerging-market securities.
Performance benchmark: MSCI Emerging Markets Index (NDR)
Typical number of equity holdings: 40 to 70
Strategy inception: May 2011
: The Newton Concentrated Global Emerging Markets strategy changed its name from Newton Global Emerging Markets strategy on Jan 1, 2023.

Investment Team

: Our Concentrated Global Emerging Markets strategy is managed by an experienced team. In-house research analysts are at the core of our investment process, and our multidimensional research platform spans fundamental, thematic, ESG, quantitative, geopolitical, investigative and private-market research to promote better-informed investment decisions

Want to find out more?

Liliana Castillo Dearth

Head of emerging markets and Asia equities

Alex Khosla

Portfolio manager, Emerging Markets and Asia Equities team

Zoe Kan

Portfolio manager, emerging markets and Asia equities team

Fei Chen

Investment analyst

Aditya Shah Shah

Portfolio analyst, Emerging Markets and Asia Equities team

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.

Analysis of themes may vary depending on the type of security, investment rationale and investment strategy. Newton will make investment decisions that are not based on themes and may conclude that other attributes of an investment outweigh the thematic structure the security has been assigned to.

Newton will make investment decisions that are not based solely on ESG considerations. It is one of many inputs into the fundamental analysis. Other attributes of an investment may outweigh ESG considerations when making investment decisions. The way that material ESG considerations are assessed may vary depending on the asset class and strategy involved. As of September 2022, the research team performs ESG analysis on equity securities prior to their addition to Newton’s Research Recommended List (RRL). ESG reviews are not performed for all fixed income securities. The portfolio managers may purchase equity securities that are not included on the RRL and which do not have ESG reviews. Not all securities held by Newton’s strategies have an ESG review completed prior to investment.

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.

Geographic Concentration Risk: The strategy primarily invests in a single market which may have a significant impact on 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.

Emerging Markets Risk: Emerging Markets have additional risks due to less-developed market practices.

Concentration Risk: A fall in the value of a single investment may have a significant impact on the value of the strategy because it typically invests in a limited number of investments.

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 programs. 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.

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.