Newton Global Higher Income Income
HL comment
Our view on this Fund
Since its launch three years ago the Newton Global Higher Income Fund has had a pretty strict yield requirement for purchasing stock. Newton is now proposing to adjust this in the wake of converging yields across the globe.
Previously the fund managers could only purchase shares with a yield at least 50% greater than the yield of the FTSE World Index. If the share’s yield then fell below a 25% premium to the index then it would have to be sold. This ensured that the fund would remain focused on stocks with a yield significantly above average.
Newton’s proposal means that in the future new purchases will have to yield at least 25% more than the index, with stocks automatically sold if they fall below the average. Newton feels this is in the best interests of investors as yields across world markets have gradually converged in recent years as more companies recognise the benefit of paying regular dividends.
We are comfortable with this change and remain happy for the Newton Global Higher Income Fund to be a part of the Wealth 150, the list of our favourite funds in each sector.
27-11-2008
Information from the fund manager
Please note: The information in this box has been provided by, and is issued by, the fund manager and not Hargreaves Lansdown.
HL group comment: Newton
Our view on this Fund Management Group as a whole
When Stuart Newton set up his investment business in the early eighties he specialised in pension fund management. However his initial success led to increased demand by private investors and since that time a whole host of investment funds have been launched and the group has continued to expand without the fanfares that many groups engineer. The group manages over £38 billion through it's retail funds, institutional funds and private client portfolios. In order to provide incentives to key staff, the company offers bonuses based on corporate, team and individual performance. They would stress, however, the importance of the 'team' structure being far superior when rewarding employees and do not believe in offering packages based solely on individual success. In 1998 Newton was acquired by the US based Mellon Financial Corporation and has provided them with proven international expertise and a platform for entry into Europe.
13-09-2007
HL sector comment: Global Growth
Our view on this sector
This sector contains a diverse mix of funds so check the investment strategy before you invest. Some funds can provide good all round exposure to world markets, allowing investors to benefit from a wide range of economies, others are more specialist. The credit crunch has affected world markets and this will be reflected in fund returns.
20-11-2008