Newton Investment Management, which runs a number of thematic investments, is introducing ‘abundance’ and ‘mind the gaps’ to its menu.
The themes identify long-term trends and structural transformations in the wider world that are expected to shape the investment landscape.
‘Abundance’ focuses on factors that lead to an overwhelming supply of goods and services. For example, one of these is pricing pressure, which sees companies more challenged to maintain pricing power in a world where nominal revenue increases are harder to come by.
Successful companies are likely to be those with pricing power and competitive positions underpinned by a combination of brand strength, unique offerings, technological innovation, and adaptable low cost operations. This, says Newton, will lead to an abundance of choice for consumers.
The focus of ‘Mind the gaps’ is weak global growth, which is creating greater differences between countries, industries and companies. Divergence in fortunes, policy initiatives and the performance of different economies and businesses will be amplified, Newton says. The approach entails a highly cautious approach to companies with poor governance, under-investment in technology, or excessive borrowing.
Newton has used global investment themes to inform its perspective on the investment landscape and identify long-term forces of change for over 30 years, says Charles French, head of investment at Newton.
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