There has been a change at the top for one of our IC Top 100 Funds, but a subsequent strategy overhaul is unlikely. James Harries, manager of the £4.4bn Newton Global Income (GB00B7S9KM94) fund, and alternate manager of the £9.1bn Newton Real Return (GB00B8GG4B61), is leaving next year to join Troy Asset Management. Investment experts predict money could follow Mr Harries out of the door, but the income fund's team-based approach should mean little change to the investment strategy.
Newton Global Income has performed well under Mr Harries, who has run it since November 2005 - it is the top-performing fund in the Investment Association global equity income sector over one year. It is also the third best over five years out of 19 such funds.
| 1-year total return (%) | 3-year cumulative total return (%) | 5-year cumulative total return (%) | |
|---|---|---|---|
| Newton Global Income Fund | 5.9 | 29.3 | 53.5 |
| IA Global Equity Income sector average | -1.1 | 24.4 | 37.7 |
Source: Trustnet as at 15 December 2015
Nick Clay, who has been alternate manager on the income fund since 2012, will become lead manager, and expects little or no change to the strategy. Newton runs its funds via a team approach, which constructs portfolios according to a number of house themes.
"The Newton desk structure is quite collegiate and we openly discuss companies across the teams," says Mr Clay, who has also been lead manager of an offshore version of the Global Income Fund since 2012.
Adrian Lowcock, head of investing at AXA Wealth, expects little change in the short term given the handover to Mr Clay and the "long term, fairly cautious" nature of the strategy.
"At the moment, existing investors should stick with the fund: the transition to Mr Clay should be fairly smooth and we shouldn't see significant changes," he says, but adds the income fund could experience substantial redemptions as a result of Mr Harries' departure.
Heather Ferguson, investment analyst at Hargreaves Lansdown, agrees major changes to the strategy are unlikely. "That said, as we haven't met Mr Clay it's hard to hold the same level of conviction in the fund and be as positive on its prospects moving forward," she says. "But I don't think there is any need for investors to make any changes until we know more."
How the chips fall
Analyst Ian Clark remains a member of the Newton income fund's team, and will be joined by Terry Coles, who joined Newton five years ago as a manager in the global equities team.
Mr Harries will give up his role as alternate manager of Newton Real Return, which is also an IC Top 100 Fund, to be replaced by Suzanne Hutchins. Iain Stewart remains lead manger of this fund.
