UK Institutional Emerging Equity Income

Strategy highlights

  • Disciplined approach, which includes buy and sell yield criteria, taking thematic research into consideration
  • Concentrated portfolio with long-term focus and an emphasis on quality, governance and consistency of dividends
  • Harnessing time, consistency of process, and the compounding power of dividends with emerging market growth
  • Stock selection driven by bottom-up proprietary research which is underpinned by our multidimensional approach
Learn more about our multidimensional investment philosophy

Strategy profile

Objective

To achieve income together with long-term capital growth from investing in emerging-market securities

Performance benchmark

MSCI Emerging Markets Index (NDR)

Typical number of equity holdings

40 to 60

Yield discipline

Every new holding must have a prospective yield of at least 85% of the yield achieved by the comparative index. Any holding whose prospective yield falls below a 40% discount to the yield achieved by the index will be sold. On account of liquidity, it may not be possible to dispose of an entire holding immediately.

Strategy inception:

October 2012

Investment team

Our Emerging Equity Income 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, responsible investment, quantitative, geopolitical, investigative and private-market research to promote better-informed investment decisions.

Want to find out more?

Contact us

Zoe Kan
Zoe Kan

Portfolio manager, emerging markets and Asia equities team

Alex Khosla
Alex Khosla

Portfolio manager, Emerging Markets and Asia Equities team

Fei Chen
Fei Chen

Investment analyst

Aditya Shah
Aditya Shah

Portfolio analyst, Emerging Markets and Asia Equities team

Liliana Castillo Dearth
Liliana Castillo Dearth

Head of emerging markets and Asia equities

Insights

Article

Navigating the new normal: The future of equity investment

We explore how equity investors can harness long-term growth trends amid a changed economic backdrop.
11 October 2024 John Porter III
Nature, Outdoors, Pond
Blog

Time to refocus on Asian income outcomes?

The perception that investing in Asia is solely a play on global macro and export growth should change.
12 July 2024 Zoe Kan
Blog

India: Formalisation and digitalisation are creating opportunities

Findings from a research trip to India.
17 May 2024 Liliana Castillo Dearth

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.

ESG can be one of many inputs into the fundamental analysis. Newton will make investment decisions that are not based solely on ESG analysis. Other attributes of an investment may outweigh ESG analysis when making investment decisions. The way that material ESG analysis is assessed may vary depending on the asset class and strategy involved. As of September 2022, the equity investment team performs ESG analysis on equity securities prior to their recommendation. ESG analysis is not performed for all fixed-income securities. The portfolio managers may purchase equity securities that are not formally recommended and for which ESG analysis has not been performed.

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.
  • Liquidity risk: The strategy may not always find another party willing to purchase an asset that the strategy wants to sell which could impact the strategy’s ability to sell the asset or to sell the asset at its current value.
  • 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.
  • High yield companies risk: Companies with high-dividend rates are at a greater risk of not being able to meet these payments and are more sensitive to interest rate risk.
  • 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.