View more on these topics

Newton yields to income demand

Newton

Newton Global Higher Income Fund

Type: Oeic

Aim: Income and growth by investing in a portfolio of global equities

Minimum investment: Lump sum 1,000, monthly 50

Investment split: 31.4% Asia Pacific ex Japan, 27.8% Europe ex UK, 13.4% UK, 13.1% US, 6.7% Latin America, 3.8% Japan, 3.8% cash

Isa link: Yes

Pep transfers: Yes

Charges: Initial 4%, annual 1.5%

Special offer: Initial charges reduced to 3%

Offer period: Until November 30, 2005

Commission: Initial 3%, renewal 0.5%

Tel: 0500 660000

Newtons Global Higher Income Fund is an Oeic that aims for income and growth by investing in a portfolio of global equities. Stock selection will be driven by themes and there will be a strict buy and sell discipline based on prospective yields.

Bright Financial Services sales director Paul Breaks says: British investors, as we know, like income. I understand there is currently 36 billion invested in UK income funds. To date, this reliance on the home market is understandable, as up until now there have been very few funds which offer attractive yields and international diversification.

However, he believes that such dependence on one market is not ideal. He points out that this fund aims to provide diversification and take advantage of the opportunities that now exist worldwide.

Surprisingly enough, the most attractive yields can now be found in Europe, Asia and Latin America as companies become far more responsive to the needs of their shareholders, namely in the form of dividends. Currently 90 per cent of stocks yielding more than 3 per cent are outside the UK. says Breaks.

According to Breaks, Newton has a good equity income track record and aims to generate a 4 per cent yield payable quarterly with this fund. More importantly the fund will aim to achieve increasing annual distributions, together with long-term capital growth through a concentrated portfolio of between 60-80 stocks. he says.

Breaks then highlights the strict buy/sell criteria which will be imposed as a good feature. Only stocks delivering 50% yield premium to the index may be considered. Should a selected stock yield fall to a 25 per cent premium it will be sold, he says.

While there is nothing major that Breaks dislikes about this product, he notes that the stockpicking process means the portfolio is heavily weighted to the Far East and Europe. Therefore it is not for first time buyers, he says. Plus currency risk is always a factor to take into account with international funds.

Scanning the market for possible competitors Breaks says: Other than UK income and bond funds, I dont believe there is much in the way of direct competition.

Summing up Breaks says: I think Newton is on to a real winner here. The strict yield discipline, the intention to increase the yield and quarterly payments from investing in companies that are also in the potentially most rewarding growth markets make this the most exciting fund I have yet reviewed.

BROKER RATINGS

Suitability to market: Good
Investment strategy: Good
Charges: Average
Remuneration: Average

Overall 8/10

Recommended

Doel to run new F&C UK opps fund

F&C is to offer a UK opportu- nities fund which will be run by ex- DWS manager Phil Doel. The fund will hold 25 equ- ally weighted stocks, enabling Doel to back his favourite stockpicks. The launch follows Aberdeen takeover of DWS last autumn. Analysts say investor confidence is picking up and their only reservation […]

Hornby given top job at HBOS

HBOS has announced a top-level shake-up that will see chief operatingofficer Andy Hornby becoming chief executive later this year.Hornby will replace outgoing CEO James Crosby on July 31. Additionally,HBOS has poached Royal Bank of Scotland head of retail banking Benny Higginsto lead HBOS retail businesses.HBOS chairman Dennis Stevenson said: “James has had a major impact […]

Levy may break following FSA review of compensation costs

After a jam-packed regulatory schedule in 2005, this year will largely see a consolidation of existing regimes. Personal Finance Society public affairs director John Ellis believes the effects of depolarisation will finally kick in as the honeymoon period enjoyed by advisers comes to an end. Ellis says falling commission levels will result in a move […]

Family values

The Government should remember that low value does not necessarily mean the best value

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com