Newton IM extends its sustainable range

BNY Mellon Investment Management has announced the launch of the BNY Mellon Sustainable Global Dynamic Bond Fund, managed by its investment firm Newton Investment Management. It is the fifth UK-domiciled sustainable fund launched as part of Newton’s sustainable suite of products, which aim to invest in sustainable sovereign bonds, and attractive companies with sustainable business practices and no material unresolvable ESG issues.

The Fund is a sustainable version of Newton’s existing Global Dynamic Bond strategy and is the Sterling version of the Euro currency BNY Mellon Sustainable Global Dynamic Bond Fund in the Dublin-domiciled BNY Mellon Global Funds, plc range. It is an absolute-return strategy, following an unconstrained, dynamic asset-allocation approach. It also has the flexibility to use stabilising assets and hedging positions to provide downside protection.

Following Newton’s global thematic approach in seeking to identify areas of potential opportunity and risk, the Fund invests in sustainable government bonds, and bonds of companies that positively manage the material impacts of an issuer’s operation and products on the environment and society. It avoids bonds with material unresolvable ESG risks which are likely to negatively affect future performance, and does not invest in the bonds of any company that derives more than 10% of its turnover from the production and sale of tobacco.

It will be managed by Paul Brain, Trevor Holder, Carl Shepherd, Scott Freedman and Martin Chambers and will measure its performance against cash (1-month LIBOR) + 2% per annum over five years before fees. In doing so, it seeks to achieve a positive return on a rolling three-year basis.[1]

This fund follows the launches, of the BNY Mellon Sustainable Global Equity, Sustainable Real Return, Sustainable Sterling Bond and Sustainable Global Equity Income funds. Newton runs seven sustainable strategies in total across both the UK BNY Mellon Investment Funds domiciled range and the Dublin-domiciled BNY Mellon Global Funds, plc range.

Michael Beveridge, Head of UK intermediary distribution at BNY Mellon Investment Management, said: “Responsible investing has played a crucial role in Newton’s investment processes since they were founded 42 years ago. With the growing global focus on environmental, social & governance issues and their impact on investments, we know that investors are actively seeking sustainable funds across all asset classes which yield good returns.

Managed by Newton’s highly experienced fixed-income team, the BNY Mellon Sustainable Global Dynamic Bond Fund strategy builds on the existing Global Dynamic Bond franchise which has over £2bn in the UK. It is another important milestone as we expand our suite of sustainable strategies.”

Paul Brain, Head of Fixed Income at Newton Investment Management commented: “Sustainability has been on the rise in the fixed income space over the past five years – we believe sustainable bonds can provide investors with the opportunity to direct their fixed-income investments towards a range of positive impacts. ESG factors have already been proven to have a material benefit on a company’s financial profile and we believe in-depth analysis of ESG factors, alongside issuer engagement where appropriate, can help to enhance long-term investment opportunities in this growing sector.

“The BNY Mellon Sustainable Global Dynamic Bond Fund offers investors broad access to bonds that meet Newton IM’s sustainability criteria for fixed-income investment. The assessment of ESG factors within credit analysis enhances risk mitigation, which is particularly important given the asymmetric nature of bond returns.”

[1] A positive return is not guaranteed and a capital loss may occur

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