Roy Keenan from Yarra Capital Management shares insights with James Dunn from The Inside Network on the role of active management. The Inside Adviser
After the Hayne Royal Commission many advisers decided to steer away from large dealer groups in favour of becoming self-licensed. In the last six months, however, that trend has taken an abrupt turn.
BNY Mellon launches ‘Future’ thematic focus
BNY Mellon, one of the three oldest banks in the US, in partnership with its subsidiary Newton Investment Management, is launching a range of industry-leading global equity strategies. Aptly named the “Future” funds, they will seek to offer investors exposure to the tailwinds associated with climate change, the revolution in food production and importantly, the changing consumer demands of the ageing population.
Founded in 1784 by one of the US’ Founding Fathers (and Broadway musical inspiration) Alexander Hamilton, the BNY Mellon group has grown into the world’s largest custodian bank, servicing all sectors of financial markets, including its global-leading Pershing LLC settlement business. The group has US$38.6 trillion ($50.1 trillion) in assets under custody along with US$2 trillion ($2.6 trillion) under management through its boutique managers, including Newton, which itself invests more than A$81 billion.
This foray into ‘future’ investing is not a new concept for Newton, which has been among the global leaders in ‘thematic’ investing since its inception. Newton’s view is one of focus rather than seeking to understand every part of every market, stating that it wants “to consider the trends that will shape the world of investment, and avoid being distracted by market noise.” These themes are spread across nine key areas including ‘Earth Matters’, ‘State Intervention’ and ‘Net Effects’.
In a world of ‘green-washing’ the ‘Future’ earth strategies are clearly seeking to be as pure as possible, overcoming somewhat the flooding of the industry with ESG options in recent years. The funds will be aptly named ‘Future Earth’, ‘Future Food’ and ‘Future Life’, and offer a rare, actively managed and direct exposure to these important themes.
The Future Earth strategy will invest into “companies that proactively contribute to an overall shift towards helping protect the Earth’s environment and natural resources.” The strategy expands on the group’s existing ‘Earth Matters’ theme, considering a wide range of environment issues including the exhaustion of natural resources and its implications on government policy. The key sub-sectors of focus are efficient infrastructure, resource management and recycling, clean energy and electric vehicles.
The “Future Food” strategy on the other hand will focus on technological innovations across the supply chain, ranging from crop yields to changing consumption patterns. They will cover the entire network from agriculture and production, where huge changes are occurring, into processing, innovation, retail and consumption, ultimately seeking to benefit from what is thus far an under-appreciated sector.
Finally, the “Future Life” strategy, has a dedicated focus on the ageing population, particularly in the developed world, along with the far-reaching implications of this on everything from travel to infrastructure and healthcare. With all the attention paid to the growing middle-class, this strategy will focus on four sub-themes including care and supported living, financial security, innovation in health and ‘living better.’
Commenting on the launch, Paul Bolinowsky, BNY Mellon country head for Australia, says: “Disruptive change is happening at a record pace across all elements of our lives. We believe that by identifying those changes early and investing in them over the long-term we can capitalise on these structural drivers of growth for our clients.”
Bolinowsky says this will give BNY Mellon’s clients the chance to gain direct exposure to investment themes that the firm believes will deliver some of the most successful investment outcomes in the coming years. “It also allows them to allocate to specific themes where they have most conviction in the long-term trends and will be of interest to investors seeking long-term thematic exposure,” he adds.
It seems there couldn’t be better timing for the launch given the increasing demand for transparency into where client investments are being made and the lack of truly “sustainable” options.
