Dynamic US Equity

This strategy is offered by Newton Investment Management Ltd (‘NIM’). This strategy may be managed by an affiliate of NIM.

Strategy overview

The Dynamic US Equity strategy applies the widely recognised academic theory of the Capital Asset Pricing Model (CAPM) and the Capital Market Line (CML) to develop a portfolio of three broad exposures (S&P 500®, long US Treasury bonds, and cash) designed to outperform the S&P 500® Index with a similar level of risk.

The strategy allows for modest leverage (up to 50%) to dynamically allocate across these three broad exposures or risk premiums. By design, fundamental valuation, macro, volatility and tail-risk management are incorporated into the strategy, which historically has led to low downside participation and high upside participation.

Strategy Profile

Objective: Dynamic US Equity seeks to outperform the S&P 500® Index while maintaining a similar level of risk. The strategy’s historical excess returns exhibit very low correlation to its peer group, including traditional stock-selection and factor-based approaches.
Benchmark:: S&P 500® Index. Can also be implemented as an overlay versus client benchmarks.

The S&P 500® Index performance benchmark is used as a comparator for this strategy. The strategy does not aim to replicate either the composition or the performance of the performance benchmark.
Strategy inception:: 31 August 1989

Investment team

: The strategy follows a systematic investment process driven by model recommendations. Portfolio managers use model outputs to construct the optimal portfolio. The research team maintains and enhances the systematic processes that drive portfolio weights.

A team of 17 investment professionals.

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Ryan Arita

Portfolio manager, Asset Allocation team

Dimitri Curtil

Global head of multi-asset solutions

James H Stavena

Head of portfolio management, Multi-Asset Solutions

Torrey K Zaches

Portfolio manager, multi-asset solutions

Past performance is not a guide to future performance. 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.

Key investment risks

: Objective/performance risk: There is no guarantee that the strategy will achieve its objectives.

Geographic concentration risk: Where the strategy invests significantly in a single market, this may have a material 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.

Changes in interest rates & inflation risk: Investments in bonds/money market securities are affected by interest rates and inflation trends which may negatively affect the value of the strategy.

Credit risk: The issuer of a security held by the strategy may not pay income or repay capital to the strategy when due.

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.