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Newton Multi-Asset Growth Fund research update

Kate Marshall | Fri 04 December 2015

Investments can go down as well as up so there is always a danger that you could get back less than you invest. Nothing here is personalised advice, if unsure you should seek advice.

Christopher Metcalfe, manager of the Newton Multi-Asset Growth Fund, adopts a global thematic investment approach to help uncover risks and opportunities present in the market. His flexible style means he can invest globally across a variety of sectors, countries and asset classes, including shares, bonds and cash.

Presently the manager favours UK, North American and European equities, alongside some smaller holdings in Asian and Japanese shares. In total, equities account for 96.2% of the portfolio, where he is finding greater value compared to bonds, which account for 1.1% of the fund. The remaining 2.7% is held as cash. The manager also has the flexibility to invest in higher-risk emerging markets and high yield bonds, should he see fit.

Within the equity portion, Christopher Metcalfe currently favours sectors such as healthcare, where 18.8% of the fund is invested. In his view the valuations of pharmaceutical firms remain reasonable, while he is also optimistic that patent expiries are now peaking (in recent years patents on some popular pharmaceutical products have come to an end, forcing firms to look for new revenue streams). He is also seeing an array of innovative new drugs coming to the market, driving sales growth.

On the other hand the manager has avoided banks, oil & gas companies, and miners. In the case of the latter, falling commodity prices and weak cash flows means he is concerned dividends paid by major mining companies are unsustainable. Avoiding these poor-performing areas of the market has proven positive for performance over the course of this year.

A number of new holdings have recently been added to the fund, including Diageo. Christopher Metcalfe is encouraged the drinks maker is aiming to move away from its dependence on premium whisky sales to focus on broader growth across the business. A position in Intertrust, a Dutch business offering legal and financial administrative services to other companies, was also initiated as the manager was attracted by the firm's long-term growth prospects and attractive valuation.

Performance

Christopher Metcalfe assumed responsibility for the fund in March 2011 and has delivered a return of 51.1% over his tenure against 30.0%* for the average fund in the sector. The fund has been one of the strongest performers in its sector over this time, while the manager has achieved this return with lower-than-average volatility. Please remember past performance is not a guide to future returns.

Annual Percentage Growth
1/12/10 -
1/12/11
1/12/11 -
1/12/12
1/12/12 -
1/12/13
1/12/13 -
1/12/14
1/12/14 -
1/12/15
Newton Multi-Asset Growth -3.0% 11.3% 17.8% 11.8% 7.4%
IA Flexible Investment -3.6% 9.3% 15.6% 6.3% 1.9%

Past performance is not a guide to future returns. Source: Lipper IM* to 01/12/2015

Our view on this fund

As a member of Newton's Multi-Asset team, Christopher Metcalfe has the support of a well-resourced network of analysts and expert portfolio managers. He is an experienced fund manager in his own right, although his longer-term track record has mainly been built running UK equity portfolios. We do not feel he has extensive experience in running a multi-asset portfolio and, for this reason, the fund does not currently feature on the Wealth 150 list of our favourite funds across the major sectors. However, we will continue to monitor the fund and inform investors if our views change.

Find out more about Newton Multi-Asset Growth fund including how to invest

Please read the key features/key investor information document for Newton Multi-Asset Growth in addition to the information above.

Important information - Please remember the value of investments, and any income from them, can fall as well as rise so you could get back less than you invest. This article is provided to help you make your own investment decisions, it is not advice. If you are unsure of the suitability of an investment for your circumstances please seek advice. No news or research item is a personal recommendation to deal.


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