BNY Mellon Multi-Asset Balanced fund aims to achieve a balance between income and capital growth over a minimum of five years by investing in equities and bonds. It is part of a wider multi-asset range and uses the full power of Newton’s 130 investment professionals to invest in any geographic or economic sector in the world.
Our opinion
Using the huge resource available at Newton, manager Simon Nichols has created a rock-solid global multi-asset vehicle which uses themes to target the forces driving global change in markets. He does this by investing in what he calls “future-facing business models” which have the ability to tap into megatrends in their respective industries. The fund predominantly invests in global equities, but also has an allocation to bonds. It has proven to be a very successful formula during Simon’s tenure on the fund.
Company description
This fund is run by Newton Investment Management but under the BNY Mellon branding. BNY (Bank of New York) Mellon operates as a ‘multi-boutique’, using its size and strength to provide support and global reach to a range of more specialist investment houses. Operating across 35 different countries, the firm has $1.8trn of assets under management.
Newton itself is a UK-based investment management firm, established in 1978. It runs a variety of institutional and retail mandates spread across equity, fixed income and multi-asset strategies
Fund manager
Simon Nichols is a portfolio manager on the equity opportunities team responsible for managing both global equity and multi-asset portfolios. Simon joined Newton in 2001 and was responsible for research into a number of global industrial sectors before moving to portfolio management. Simon's experience includes managing global, multi-asset, charity and UK equity portfolios. Simon is also a chartered accountant (ACA) and prior to joining Newton he worked in both audit and insolvency practices at leading accountancy firms. He is joined on the fund by Bhavin Shah and Paul Flood.
Simon NicholsFund manager
Investment process
The BNY Mellon Multi-Asset Balanced fund typically has around 65-80 per cent invested in global equities, with the remaining allocation usually invested in high quality government bonds.
Stock selection is determined by four specific factors – global themes (such as clean energy or deglobalisation); company fundamentals (such as a company’s balance sheet/business model); a strong and improving ESG footprint; and valuations.
The team will talk to the wider research desk at Newton when evaluating potential equity and bond positions (the latter includes government, corporate, high yield and emerging market debt bonds).
Simon will typically target larger companies in industries which already have an element of growth behind them – these businesses will normally be exposed to tailwinds in markets. As a result, the fund has historically had an overweight towards sectors like healthcare and technology. BNY Mellon Multi-Asset Balanced fund is style agnostic as Simon will look at value companies, provided they are not in long-term structural decline.
The fund does have the flexibility to invest across the entire bond market, but Simon has typically preferred to offset the equities allocation by investing in high quality government bonds. Bond exposure will seldom account for more than 25 per cent of the portfolio.
ESG
ESG - Integrated
Responsible investing has been a feature of the Newton Investment Management approach for over four decades. The team has been a proxy votes since the 1970’s, as well as being one of the first signatories for the Principles for Responsible Investment.
The most important part of the ESG focus on this fund will be governance – as the team believes strong governance means management is more likely to take care of both the environmental and social footprints of their business. However, this does not mean the fund cannot hold a company with ESG challenges. For example, the team may hold an oil & gas company if it feels the valuation is low enough to compensate for issues like carbon taxes or oil spills.
Risk
The main risks on this fund are focused around stock selection and asset allocation. It invests globally, meaning there are both currency fluctuations and the additional volatility of investing in emerging markets to consider. Bond holdings can also be impacted by changing interest rates. The firm does have an independent risk team that evaluates style and valuation biases that run through the fund. There is also a constant focus on asset correlation and liquidity.
The information, data, analyses, and opinions contained herein (1) include the proprietary information of FundCalibre, (2) may not be copied or redistributed without prior permission, (3) do not constitute investment advice offered by FundCalibre, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a fund, and (5) are not warranted to be correct, complete, or accurate. FundCalibre shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Elite Fund rating is subjective in nature and reflects FundCalibre’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, FundCalibre does not guarantee that a fund will perform in line with its FundCalibre benchmark. Likewise, the Elite Fund rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund nor of its underlying securities and should not be used as the sole basis for making any investment decision. FundCalibre disclaims any responsibility for trading decisions, damages or other losses resulting from any use of the Elite Fund rating. All performance data, as well as fund size, OCF, AMC, annual income (historic), share price discount or premium, is sourced directly from FE Analytics, and will change periodically.