BNY Mellon Investment Management and Newton Investment Management Limited (Newton) today announce the launch of the BNY Mellon Sustainable Global Emerging Markets Fund (the Fund). Newton, an investment firm of BNY Mellon Investment Management, manages £3.8 billion ($5.2bn) on a sustainable basis[1], and the launch marks the eighth[2] sustainable Newton strategy available to UK investors.
The actively managed fund seeks to combine Newton’s long-standing expertise in responsible investment with the proven track record of the existing BNY Mellon Global Emerging Markets Fund. It is managed by Ian Smith and Paul Birchenough, global emerging markets portfolio managers at Newton.
Using Newton’s sustainable investment approach, the fund targets emerging-market investment opportunities in companies that are proactively seeking to manage social and environmental factors well to generate sustainable returns. These opportunities include solution providers tackling pressing social and environmental needs, best in class operators, and companies committed to investing in and positively adapting to future environmental and social needs.
The strategy/fund may also invest in companies where the team believes it can promote sustainable business practices through engagement and advocacy. The Fund will not invest in companies that have material environmental, social or governance (ESG) issues intrinsic to their business models, for example companies that derive a material proportion of their revenues from areas such as tobacco.
Ian Smith and Paul Birchenough, global emerging market equity portfolio managers at Newton, commented: “Lower- and middle-income countries represent over 80% of the global population[3], and an even higher proportion of the younger population. It is thought that roughly two thirds of the $5 to 7 trillion annual investment required to meet the UN Sustainable Development Goals by 2030 will need to be deployed in the developing world[4]. Yet emerging markets represent little more than 10% of global equity indices[5].
The data consistently demonstrates under-served needs and under-representation. It also speaks to significant opportunity to ride with the tailwinds around rising real incomes and urbanisation, as well as the adoption of technologies around clean energy, electrification, digitisation and healthcare. We believe this offers fertile ground for patient and sustainably deployed capital to have a positive effect on peoples’ lives, while also tapping into potentially large addressable market opportunities.”
Michael Beveridge, head of UK intermediary distribution at BNY Mellon Investment Management, said: “The launch of the BNY Mellon Sustainable Global Emerging Markets Fund comes at a pivotal time for UK investors, as demand for sustainable solutions is high. There are currently very few equity products focusing on sustainable opportunities in global emerging markets.
With Newton’s proven track record in global emerging markets and longstanding expertise in responsible investing, the Fund aims to provide investors with a sustainable emerging markets equity product that provides long-term capital growth while adhering to sustainability criteria.”
The performance benchmark for the fund is the MSCI Emerging Markets NDR Index. It forms part of the part of the UK-domiciled BNY Mellon Investment Funds (MIF) range and is available to institutional, intermediary and retail investors in the UK.
[1]As at 30 September 2021. This figure cites the sum of Newton’s 8 sustainable strategies
[2] Newton’s other sustainable strategies are Real Return, UK Opportunities, European Opportunities, Global Equity, Global Equity Income, Global Dynamic Bond & Sterling Bond
[3] https://data.worldbank.org/indicator/SP.POP.TOTL
[4] https://unctad.org/webflyer/world-investment-report-2014
[5] MSCI ACWI, as at 7 October 2021
