BNY Mellon Real Return SIS

Targets annual returns of cash +4% through long only investment in multiple asset classes.

  • 300.69p
    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.

  • -
    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!

  • 1.00%
    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).

  • 1.11%
    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.

  • 2.20%
    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 11 December 2019, fund data last updated 19 March 2012

The fund targets annual returns of cash plus 4% p.a. over a 5yr period. As part of this objective it will also seek to achieve positive returns on a rolling 3yr basis. It invests internationally, principally in equities, bonds and cash, but the portfolio may also include other asset classes and the fund may hold derivatives to protect it from market falls and currency swings. Newton expects the fund’s volatility to fall somewhere between that of equities and bonds.

Fund summary

Sector Targeted Absolute Return
Structure OEIC
Launched September, 1993
Size £6,403m
Yield 2.20%
Charging basis
Dividends paid 30 Sep

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 1.00%
Ongoing charges figure 1.11%

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Investment process

The starting point for the process is the views of Newton's strategy group, which attempts to identify long term trends in the global economy, such as the over-indebtedness of western countries and the rapid growth of emerging countries. The managers use these views in determining the fund’s asset allocation – they invest globally, principally in direct holdings of equities (predominantly large, multinational companies), bonds and cash. However, they also use derivatives for downside protection, income generation and currency hedging, and sometimes uses exchange traded funds (ETFs) and other collectives to access asset classes such as gold, agriculture and other commodities. Like other Newton funds, stocks are chosen from the recommendations of Newton's global sector analysts. However, stock selection also incorporates additional investment criteria to reflect the fund’s absolute return mandate. These include: - Business characteristics, such as barriers to entry and cost control; - Investment characteristics, such as absolute valuation, cashflow yield and liquidity; - Portfolio characteristics, allocation between yield, dividend growth and revaluation potential.

The fund has successfully met its performance target (cash plus 4%) through most of its life, offering fairly consistent capital growth combined with some protection from falling markets. However, it is perhaps more comparable with the more cautious funds of the Mixed Investment sectors than with its peer group - its volatility is higher than is typical for an Absolute Return fund. In particular the fund suffered significant monthly falls during the banking crisis in late 2008.

Manager research

Average monthly relative returns

  • 14/15 0.32%
  • 15/16 0.00%
  • 16/17 0.00%
  • 17/18 0.00%
  • 18/19 0.00%

Bestinvest MRI

  • 3 years 0.00%
  • 5 years 0.00%
  • Career 0.04%
  • 3 years 0.00%
  • 5 years 0.00%
  • Career 66.30%

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

Iain Stewart

Stewart joined Newton in 1985 and is a senior member of their strategy team with particular responsibility for co-ordinating the development of the global investment themes. He is also a member of the Newton Executive Committee. He specialises in managing multi-asset and global equity mandates for pension fund clients, and currently manages a range of Newton's pooled balanced funds as well as their active real return strategy. Stewart graduated from Aberdeen University and has a PhD from UEA as a result of research with the Ministry of Agriculture, Fisheries and Food, where he worked from 1980-85.

Track record

Iain Stewart has 7.6 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been +0.04%. During the worst period of relative performance (from July 1997 - October 2001) there was a decline of 7% relative to the index. The worst absolute loss has been 33%. Statistically, we estimate the probability that this fund manager is adding value, rather than being lucky, is 66%.

Periods of worst performance

Absolute -33.00% (August 2000 - January 2003)
Relative -7.00% (July 1997 - October 2001)

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.

Allocation

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Top 10 holdings

Data accurate as at 31 August 2019

5.8% United States Of Amer Treas Bills 3.375% Bds 15/11/48 Usd100
5.59% Ishares Physical Gold Etc
4.71% Invesco Physical Gold Etc
4.2% Ishares J.p. Morgan Usd Em Bond Ucits Etf
2.51% Government Of The United States Of America 2.875% 15-May-2049
2.12% Australia(Commonwealth Of) 3% Tb 21/03/47 Aud100 (Cdi)
1.81% Canada Housing Trust No 1 2.35% Bds 15/06/27 Cad5000
1.44% Brazil(Federative Republic Of) 4.875% Nts 22/01/21 Usd1000
1.42% Aia Group Ltd
1.34% Renewables Infrastructure Grp(The)
Source: Trustnet

Sector breakdown

Government Bonds 18.00%
Alternative Assets 15.00%
Precious Metals & Stones 11.00%
Cash & Cash Equivalents 11.00%
Corporate Bonds 9.00%
Debt 8.00%
Financials 5.00%
Industrials 4.00%
Technology 3.00%
Index Linked 3.00%

Portfolio

80-100 stocks. Bond holdings may be in sovereign or corporate debt, which may be investment grade or non-investment grade.

Constraints

Maximum 5% in any one equity. Maximum 20% in any global equity sector. There are no other regional, sector or benchmark constraints.

Key Investor Information

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