Investment philosophy and process

Our investment philosophy is based upon our conviction that no company, market, or economy can be considered in isolation; each must be understood in a global context.

We believe firmly that, in a rapidly shrinking world, investment prospects can only be evaluated properly by understanding events, trends and competitive pressures on a worldwide basis. We believe also that a geographically constrained approach limits a portfolio manager's ability to harness investment opportunities.

A strategy group, drawing on the expertise of all Newton's global sector analysts, investment managers and dedicated strategists, provides economic and strategic guidance within our stock selection process and the group is also responsible for formalising our investment themes. Themes represent our interpretation of the key forces that drive change across the globe, such as population dynamics, the growth of developing economies and the growth of the networked world.

The work of the strategy group provides a stimulus for debate at the widest level and highlights areas of opportunity for our investment team to pursue in depth.

One of our key strengths is our ability to conduct proprietary research across global sectors and not simply within the narrow confines of geographic borders.

Our analysts look, on a global basis, for good-quality companies whose stocks are valued attractively. The interaction between our research analysts and investment managers is key to the construction of portfolios that are well-placed to help to fulfill our clients' objectives.

Our organisational structure encourages lateral thinking, fluid communication and the swift implementation of ideas. Our analysts and investment managers are mainly located on a single investment floor in London, which ensures that our investment process is flexible and opportunistic. The entire investment team is responsible for generating investment ideas and this has been an important factor behind the strength of our performance track record.

Risk is managed throughout the investment process at Newton, not simply through the imposition of risk controls. Our investment managers monitor risk and return actively on a daily basis and the scrutiny of the Portfolio Analytics Team (PAT) and Portfolio Analysis Group (PAG) provides additional "quality control" to protect the interests of clients (and thus of Newton). The PAT and PAG review and identify the risk inherent in each portfolio regularly, ensuring thereby that managers take only intended and appropriate risks in accordance with each client's objectives.