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BNY Mellon Sustainable Real Return Class W - Income (GBP)

Sell:106.45p Buy:106.45p Change: 0.26p (0.24%)
Prices as at 20 December 2024
Sell:106.45p
Buy:106.45p
Change: 0.26p (0.24%)
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
Invest now
Prices as at 20 December 2024
Sell:106.45p
Buy:106.45p
Change: 0.26p (0.24%)
Prices as at 20 December 2024
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
Invest now
The selling price currently displayed is higher than the buying price. This can occur temporarily for a variety of reasons; shortly before the market opens, after the market closes or because of extraordinary price volatility during the trading day.

Our view on this Fund

This fund is on the Wealth Shortlist of funds our analysts believe have the potential to outperform their peers over the long term. However, this is not a recommendation to buy.

Matthew Brown and Philip Shucksmith have been the fund's lead managers since launch in April 2018. They're both experienced investors and have served on the Real Return team for well over a decade.

BNY Mellon's team-based investment process, however, is built on the foundation that the whole is greater than the sum of its parts. The BNY Mellon Sustainable Real Return Fund is managed with an investment approach that is heavily reliant upon the skills and experience of the wider Real Return investment team.

The team's built up a good track record over a long period of time with another fund that's managed in a similar way to this one, albeit with less emphasis on sustainability. Their experience and time-tested investment process gives us confidence they can deliver good returns in a sustainable way with this fund, although there are no guarantees.

We think this fund could be a good option for a more defensive portfolio seeking steadier gains, and be a good addition to a responsible portfolio. It could also provide useful diversification to more adventurous portfolios focused on share-based investments, by giving exposure to other asset classes and adding some balance to returns.

Please note the fund's charges can be taken from capital. This increases the yield, but reduces the potential for capital growth.

Our view on the sector

Total Return funds try to grow investors' money over the medium-to-long-term by making money when markets are rising, and sheltering it when they fall. Most invest in a combination of assets from shares and bonds to cash, commodities and currencies. They're not guaranteed to make money though. Like any investment they will fall as well as rise in value so you could get back less than invested . The return is determined by the manager's skill and each fund will have a different investment process. That's why we think each fund should be judged on its own merits.

Performance Analysis

The Real Return team has an excellent long-term track record. Our analysis of their performance since the team's inception in 2004 suggests they've beaten their peers in the IA Targeted Absolute Return Sector. This fund will behave differently than previous ventures though and there are no guarantees.

We expect the fund to provide some shelter when stock markets fall, but we'd expect it to lag when markets rise quickly.

Investment Philosophy

The team places more emphasis on not losing money than making it. If you lose less money in the bad times, you have less ground to make up in the good times. They use diversification, hedging (investing to potentially benefit in a range of outcomes), and liquidity (investing in things that are easy to sell) to help them achieve this, as well as derivatives, which can add risk to the portfolio. The team also has the flexibility to invest in high-yield bonds and emerging markets which, if used, would add further risk.

Process and Portfolio Construction

The team aims to make money in a variety of market conditions. They do this using a mix of assets that broadly fall into two camps. The first is called the 'return-seeking core'. It invests in assets the team think will provide long-term growth, such as shares and bonds issued by well-run, financially secure companies with a unique set of advantages over the competition. They also consider how well those companies manage their impact on the environment and society.

The rest of the portfolio is called the 'stabilising layer' and is invested in government bonds, commodities and cash, with the aim to add stability to returns. The managers can alter the amount invested in each section of the portfolio depending on their view of the world.

The fund's sustainable 'red lines' mean companies that violate the UN Global Compact Principles (a UN pact on human rights, labour, the environment and anti-corruption) and those incompatible with the aim of limiting global warming below 2 degrees Celsius are not considered for the fund. It also won't invest in any company that makes more than 10% of its revenues from tobacco, alcohol, gambling and several other contentious industries.

The team engages with the companies they invest in on a range of environmental, social and governance (ESG) issues and report on their progress in their Responsible Investment Report (available on the BNY Mellon website).

question mark Manager Track Record Based on HL Quantitative Research

This information is currently unavailable.

Fund Track Record

20/12/19 to 20/12/20 20/12/20 to 20/12/21 20/12/21 to 20/12/22 20/12/22 to 20/12/23 20/12/23 to 20/12/24
Annual return 8.59% 6.87% -10.16% -0.39% 4.42%

Please remember past performance is not a guide to future returns. Where no data is shown, figures are not available. This information is provided to help you choose your own investments, remember they can fall as well as rise in value so you may not get back the original amount invested.

Information about the fund

Fund manager biography

manager photo
Manager Name: Matthew Brown
Manager start date: 31 December 2018
Manager located in: TBC

Matthew is a portfolio manager and has been a member of the Real Return team since the strategy was launched in 2004. He provides strong input into security selection within global equities, working closely with Newton's team of global research analysts on new ideas and existing portfolio holdings. Matthew is a co-lead manager of the Newton Sustainable Real Return strategy. Since joining Newton in 2000, Matthew has acquired varied experience across a range of mandates, including multi-asset, global equity and absolute-return portfolios. He is co-lead of Newton's ?state intervention' themes group, and a CFA1 charterholder. Matthew joined Newton after graduating from the University of Bristol with a BA Hons in History. Matthew is a family man, loves to travel, and has green fingers!

manager photo
Manager Name: Philip Shucksmith
Manager start date: 24 April 2018
Manager located in: TBC

Philip is a global portfolio manager and has responsibility for managing corporate debt, convertible bond and precious metal holdings in the Real Return strategy. Philip works closely with the credit team and research analysts, combing through the recommended securities for those that best fit the characteristics which we are seeking in the Real Return Strategy in combination with the risk and return characteristics of the existing portfolio. Philip joined the Real Return team in 2008, is a CFA1 charterholder, and is a co-lead manager of the Newton Sustainable Real Return strategy and of the sterling offshore Real Return portfolio and Australian-dollar mandate.

Data policy - All information should be used for indicative purposes only. You should independently check data before making any investment decision. HL cannot guarantee that the data is accurate or complete, and accepts no responsibility for how it may be used. Benchmark data provided subject to this disclaimer.
You can buy or sell holdings in this fund through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account
Invest now