Strategy highlights

  • Sustainability assessments look beyond the financial statements, alongside fundamental bottom-up research and security valuation analysis
  • Investing in issuers that positively manage the material impacts of their operations and products on the environment and society
  • Actively omitting issuers involved in areas of high social cost, environmental degradation or violation of the UN Global Compact Principles
  • Seeks to achieve its objective with reduced volatility through security selection, asset-type flexibility and an emphasis on capital preservation
Find out more about our investment philosophy

Strategy profile

Objective

The strategy seeks to deliver a total return of SONIA (30-day compounded) +4% per annum over rolling 5-year periods, from a globally diversified portfolio of securities that demonstrate attractive investment attributes and sustainable business practices. In doing so, the strategy aims to achieve a positive return on a rolling 3-year basis. However, a positive return is not guaranteed and a capital loss may occur.

Performance benchmark

SONIA (30-day compounded) +4%*

Volatility

Expected to be between that of bonds and equities over the long term

Red lines

Our ‘red lines’ are built on a combination of exclusions that effectively avoid investments in security issuers involved in or that generate a material proportion of revenues from areas of activity that we deem to be harmful from a social and/or environmental perspective. Read more about our red lines.

Strategy inception

Composite inception: 1 May 2018

Strategy available through pooled UK vehicle

BNY Mellon Sustainable Real Return Fund


View fund performance
View Key Investor Information Document
View prospectus

* Please note that on 1 October 2021, the performance benchmark for this strategy changed from 1-month GBP LIBOR +4% to SONIA (30-day compounded) +4%.
UK Inst Sustainable Real Return strategy factsheet

Strategy factsheet

Performance and commentary for the last quarter.

Download Factsheet
RI report Sustainable real return

Responsible investment report

Stewardship activities (voting and engagement) for the last quarter and ESG metrics.

Download Report

Investment team

Our Sustainable Real Return strategy is managed by an experienced team with a wide range of backgrounds. 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?

Contact us

Philip Shucksmith
Philip Shucksmith

Portfolio manager, Real Return team

Matthew Brown
Matthew Brown

Portfolio manager, Real Return team

Andy Warwick
Andy Warwick

Co-head of Real Return team

Aron Pataki
Aron Pataki

Co-head of Real Return team

Lars Middleton
Lars Middleton

Portfolio manager, Real Return team

Brendan Mulhern
Brendan Mulhern

Global strategist, Real Return team

Aaron Sinadjan
Aaron Sinadjan

Portfolio analyst, Real Return team

Chris King
Chris King

Senior portfolio analyst, Real Return team

Catherine Doyle
Catherine Doyle

Investment specialist

Insights

Blog

Shareholder resolutions: Defining Newton’s approach

We explain why our approach to shareholder resolutions is to judge each one on its individual merits.
02 April 2024 Therese Niklasson, Diya Choudhury
Video

Sustainable Real Return – quarterly outlook

Phil Shucksmith discusses why now could be an interesting time to look for the sustainable winners.
14 February 2024 Philip Shucksmith
Chopsticks, Food, Food Presentation
Audio

Bug appétit?

Discover how one company is swarming the food industry with a six-legged new ingredient.
30 January 2024 Raphael J. Lewis, Jack Encarnacao

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.

Newton will make investment decisions that are not based solely on ESG. Other attributes of an investment may outweigh ESG analysis when making investment decisions. The way that ESG and sustainability is assessed and the assessment of their suitability for Newton’s sustainable strategies may vary depending on the asset class and strategy involved. For Newton’s sustainable strategies, ESG analysis is performed prior to investment for corporate investments (single name equity and fixed-income securities). The analysis will then also follow the Newton sustainable investment process to ensure it fits with the wider Newton sustainable investment philosophy.

Key investment risks

  • Performance aim risk: The performance aim is not a guarantee, may not be achieved and a capital loss may occur. Strategies which have a higher performance aim generally take more risk to achieve this and so have a greater potential for returns to vary significantly.
  • 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.
  • 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 ratings and unrated securities risk: Bonds with a low credit rating or unrated bonds have a greater risk of default. These investments 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.
  • 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.
  • China Interbank Bond Market and Bond Connect risk: The strategy may invest in China interbank bond market through connection between the related Mainland and Hong Kong financial infrastructure institutions. These may be subject to regulatory changes, settlement risk and quota limitations. An operational constraint such as a suspension in trading could negatively affect the strategy’s ability to achieve its investment objective.
  • CoCos risk: Contingent convertible securities (CoCos) convert from debt to equity when the issuer’s capital drops below a pre-defined level. This may result in the security converting into equities at a discounted share price, the value of the security being written down, temporarily or permanently, and/or coupon payments ceasing or being deferred.
  • Sustainable strategies risk: The strategy follows a sustainable investment approach, which may cause it to perform differently from strategies that have a similar objective but which do not integrate sustainable investment criteria when selecting securities.
  • Investment in infrastructure companies risk: The value of investments in infrastructure companies may be negatively impacted by changes in the regulatory, economic or political environment in which they operate.
  • 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.