BNY Mellon Emerging Income Institutional W

An emerging market equity fund that targets a reasonable income yield

  • 102.96p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • 143.26p
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.75%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.87%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 3.20%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 15 January 2021

The fund aims to provide an attractive level of income as well as capital growth by investing in companies that are based in, or derive a significant amount of their revenue from, the emerging markets. The manager follows the house style of picking stocks with a thematic framework, such as growing demand for healthcare and infrastructure building, whilst there is a targeted income of at least 15% more than the benchmark.

Fund summary

Sector Global Emerging Markets
Structure OEIC
Launched October, 2012
Size £78m
Yield 3.20%
Charging basis Capital
Dividends paid Feb, May, Aug, Nov

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.75%
Ongoing charges figure 0.87%

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Investment process

The starting universe for this fund is the FTSE All World Emerging Index, which notably does not include South Korea, and this list is further refined by screening for companies with an income yield. This produces a stock list of around 800 names that is the starting point for investment. Managers create a portfolio of 40-50 names from this list that together achieve the minimum yield of 15% above the benchmark, and fit one of a number of long-term themes, such as global networking, energy requirement and global re-alignment. A strict yield discipline makes the managers forced sellers of any stock falling below 85% of the benchmark yield. Due to the yield focus on this fund, it is likely to have a natural underweight to materials and oil&gas sectors as well as India, where yields are traditionally particularly weak.

This is a very interesting fund that recently launched to add to Newton’s other income products; the co-manager, Pidcock, also runs the highly successful Newton Asian Income fund. This fund is particularly appealing as the investment process is specifically geared towards stable income in addition to capital appreciated, rather than applying a fairly simple income screen to a list of growth stocks. At present the co-manager Whitbread, who is responsible for the lion’s share of the coverage, lacks enough of a track record to be considered for a Bestinvest rating, but this is definitely a fund to watch.

Manager research

Average monthly relative returns

  • 16/17 -0.18%
  • 17/18 -0.81%
  • 18/19 -0.25%
  • 19/20 0.13%
  • 20/21 -0.93%

Bestinvest MRI

  • 3 years -0.35%
  • 5 years -0.41%
  • Career -0.34%
  • 3 years 21.20%
  • 5 years 10.00%
  • Career 9.50%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Sophia Whitbread / Jason Pidcock

Whitbread joined Newton in 2005 as a Global Financial Analyst before moving to Baillie Gifford for 4 months. She returned to Newton Investment Management in 2011. At Newton she works as an investment manager in global and emerging markets. Whitbreads qualifications include CFA, IMC, MPhil and MA. Pidcock joined Henderson in 1993 as an Assistant fund manager for Asia-Pacific ex Japan. After 3 years he moved to BP Investment Management, and in 2004 joined Newton Investment Management. He is an investment leader for Asia-Pacific ex Japan. His qualifications include IMC and BA.

Track record

Sophia Whitbread / Jason Pidcock has 8.2 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.34%. During the worst period of relative performance (from April 2013 - October 2020) there was a decline of 38% relative to the index. The worst absolute loss has been 27%.

Periods of worst performance

Absolute -27.00% (April 2013 - September 2015)
Relative -38.00% (April 2013 - October 2020)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

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Top 10 holdings

Data accurate as at 31 July 2020

9.5% Taiwan Semiconductor Manufacturing
8.52% Samsung Electronics Co
4.09% British American Tobacco
3.95% Clicks Group Ltd
3.7% Link Real Estate Investment Trust Units
3.66% Ping An Insurance(Gr)Co Of China
3.53% Aia Group Ltd
3.47% Macquarie Korea Infrastructure Fund Npv
3.22% Transmissora Alianca De Eneg Elec
3.21% Sociedad Quimica Y Minera De Chile
Source: Trustnet

Sector breakdown

Information Technology 22.00%
Financials 21.00%
Consumer Staples 16.00%
Utilities 10.00%
Materials 6.00%
Industrials 6.00%
Communications 6.00%
Real Estate 5.00%
Consumer Discretionary 2.00%
Energy 2.00%

Portfolio

- 40-50 stocks - Benchmark excludes South Korea

Constraints

- Stocks must yield at least 85% of the benchmark

Key Investor Information - Income

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Key Investor Information - Accumulation

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