The manager, Jason Pidcock, offers a consistently high yield in excess of 5% due to the stringent income targets, and has a consistently strong record over several years. Relative to the peer group, the fund has a bias towards the more developed economies of Australia, Singapore and Taiwan, whilst being significantly underweight in China and South Korea. In this regard, the fund can be considered relatively conservative in its approach, but this has served the manager well in the past and there is every reason to expect good things from this fund.
The fund aims to achieve a high and rising income together with long-term capital growth primarily through investments in securities in the Asia ex Japan region (including Australia and New Zealand). As with other Newton equity income funds strict yield criteria apply to all securities in the portfolio. Stocks are identified that initially pay a prospective yield in excess of that of the reference benchmark, the FTSE AW Asia Pacific ex Japan Index. This reduces the investment universe from over 1,500 stocks to around 600. Any stock whose yield falls to a 15% discount to the benchmark will be sold. The manager identifies stocks that offer an attractive yield, and also those that are in a position to significantly grow their dividend over the medium-to-long term.