Newton Dreyfus Global Equity
Separately Managed Accounts
QUARTERLY INVESTMENT GUIDE
FIRST QUARTER 2016
People
Dreyfus
With over 60 years of investment expertise,
Dreyfus has built a strong reputation for
professional asset management, quality
and integrity. Dreyfus Investments is a
division of MBSC Securities Corporation,
a subsidiary of The Dreyfus Corporation.
Dreyfus Investments offers an array of
separately managed accounts with a
range of asset classes and investment
styles from which to choose, all managed
by a distinguished list of world-class
institutional managers specializing in
distinct areas of investment expertise.
Dreyfus and Newton are both part of
BNY Mellon.
Newton Capital Management Limited
(Newton)* has been managing investments
on behalf of individual investors and
institutions since 1978 and currently
manages over $69 billion for pension
funds, charities and institutions. Over 80%
of Newton’s institutional clients appoint
it to manage money on a global basis. As
such, Newton’s 10-member global equity
team manages over $23.5 billion in global
equity mandates.
Newton strongly believes in the powerful
effect of constant interaction, challenge
and information sharing among investment
professionals. This is why the entire team
of investment professionals is located
in one open-plan office in London. This
single-office location, coupled with the
flat structure and performance-driven
culture of the team, encourages creative
thinking, fluid communication and swift
implementation of ideas for the benefit
of all clients.
Philosophy
Newton’s investment philosophy is
structured around the central tenet
of its business: “No company, market
or economy can be considered in
isolation. Each must be understood in a
global context.” Newton firmly believes
that in a rapidly shrinking world, only
by understanding events, trends and
competitive pressures worldwide can the
prospects for stocks be properly evaluated.
Process
Newton’s investment strategy combines
a bottom-up stock selection process with
a global thematic framework, a process
which has remained unchanged since the
firm’s inception more than 30 years ago.
The process begins with the development
of key investment themes that Newton
identifies as the current forces driving
global change. These themes can be
economic, industrial or social and are
evaluated for their long-term effect
on companies. Newton’s analysts
then interpret these themes and seek
stocks that they believe are attractively
valued, have strong fundamentals and
may benefit from one or more of the
investment themes.
Risk management and monitoring by the
Portfolio Analytics Team and Portfolio
Analysis Group provide a “quality control”
step to help protect a client’s interest
by regularly reviewing and identifying
inherent portfolio risks. This helps ensure
that the manager takes only intended and
appropriate risks in accordance with the
client’s objective.
Newton’s career analysts research
opportunities by global industry and
sector rather than by region. They are
the primary generators of investment
ideas and follow a separate career
path than portfolio managers. Portfolio
managers are then charged with
the task of constructing seamlessly
integrated portfolios, in accordance with
the objectives of each client, to reflect
Newton’s best ideas.
Newton’s investment approach is
pragmatic in that it is not wedded to any
particular style bias — attractively valued
companies do not always fall into “growth”
or “value” categories. As a result, Newton
does not always fit neatly into a “style
box,” but instead strives to add value
under varying market conditions.
Newton’s global portfolios typically hold
between 60 and 90 companies with no
constraint on sector or industry adherence
relative to the benchmark. This means
that at times the portfolios may be
significantly overweight or underweight
in certain sectors. Additionally, portfolios
may invest as much as 25% outside the
countries that constitute the MSCI World
Index, including up to 20% in emerging
markets. The portfolios consist primarily
of ADRs, as well as U.S. dollar-denominated
ordinary shares.
“Constant interaction and free-flowing
communication between Newton’s
investment professionals underpin our
investment approach. Newton strives to
create a culture where the best ideas can
emerge in our pursuit of outperformance
for our clients. At Newton, it is our belief in
the Power of Ideas which distinguishes us.”
Helena Morrissey,
CEO, Newton Capital Management Ltd.
*Newton Capital Management LLC provides marketing services in the U.S. for Newton Capital Management Limited. “Newton” refers to the Newton group
of companies that include Newton Capital Management Limited and Newton Investment Management Limited (founded in 1978). Assets under management
include assets managed by Newton Investment Management Limited and Newton Capital Management Limited. Newton Capital Management LLC, Newton
Capital Management Limited and Newton Investment Management Limited are affiliated entities.
Newton Dreyfus Global Equity
TOP 10 HOLDINGS AS OF 3/31/16
Company
Microsoft Corporation
Japan Tobacco Inc.
Alphabet Inc.
Apple Inc.
Altria Group
Express Scripts Holding Company
Toyota Motor Corp.
Citigroup Inc.
Dollar General Corporation
M3 Inc.
Total
Percent of
Portfolio
4.2%
3.2%
2.9%
2.9%
2.9%
2.8%
2.3%
2.3%
2.2%
1.9%
27.6%
Based on a model wrap account and
subject to change; actual individual
accounts may vary. There can be
no assurance that the securities
purchased will remain in the portfolio
or that other securities have not
been purchased. The holdings
listed should not be considered
recommendations to purchase or sell
a particular security. It should not be
assumed that securities bought or
sold in the future will be profitable
or will equal the performance of the
securities in this list. Upon request,
Newton will provide a list of all
securities purchased and sold during
the past year.
SECTOR ALLOCATION AS OF 3/31/16
Relative Position to Benchmark (%)
Portfolio
Consumer Staples
Information Technology
Consumer Discretionary
Health Care
Utilities
Telecommunication Services
Industrials
Materials
Energy
Financials
Cash
18.3%
21.1%
18.0%
15.5%
3.0%
1.7%
8.2%
1.2%
1.1%
7.2%
4.7%
MSCI World
10.9%
14.4%
13.3%
12.7%
3.5%
3.7%
11.0%
4.6%
6.4%
19.6%
0.0%
Underweight
Overweight
7.4
6.7
4.7
2.8
-0.5
-2.0
-2.8
-3.4
-5.3
-12.4
-14
-12
-10
-8
-6
-4
-2
0
2
4
4.7
6
8
Source: Newton. Based on a model wrap account and subject to change; actual individual accounts may vary. The MSCI World Index is a free float-adjusted market
capitalization-weighted index that is designed to measure the equity market performance of developed markets. The index includes 23 MSCI national developed
market indices. An investor cannot invest directly in any index. Unlike the MSCI World Index, which does not contain any ADRs, Newton Dreyfus Global Equity wrap
accounts are composed primarily of ADRs.
REGIONAL ALLOCATION AS OF 3/31/16
Portfolio
Europe Non-Eurozone
Japan
Other
Europe Eurozone
Emerging
Asia Pacific ex. Japan
North America
Emerging Market (Subtotal)
Developed Market (Subtotal)
16.1%
11.3%
1.4%
12.3%
0.6%
1.5%
52.2%
0.6%
94.8%
Relative Position to Benchmark (%)
MSCI World
12.7%
8.4%
0.3%
11.6%
0.0%
4.7%
62.5%
0.0%
100.0%
Underweight
Overweight
3.4
2.9
1.1
0.7
0.6
-3.2
-10.3
0.6
-14
-12
-10
-8
-5.2
-6
-4
-2
0
2
4
6
8
Source: Newton. Based on a model wrap account and subject to change; actual individual accounts may vary. The MSCI World Index is a free float-adjusted market
capitalization-weighted index that is designed to measure the equity market performance of developed markets. The index includes 23 MSCI national developed
market indices. An investor cannot invest directly in any index. Unlike the MSCI World Index, which does not contain any ADRs, Newton Dreyfus Global Equity wrap
accounts are composed primarily of ADRs.
LEARN MORE
For more information about Newton Dreyfus Global Equity portfolios,
please call Dreyfus at 1-877-334-6899.
Asset allocation and diversification cannot ensure a profit or protect against loss.
Equity investments are subject generally to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees.
Investing internationally involves special risks including currency fluctuation, political, economic and social instability, a lack of comprehensive company
information, differing auditing and legal standards and less market liquidity. These risks are enhanced when investing in less-developed, emerging markets.
Dreyfus Investments is a division of MBSC Securities Corporation, a subsidiary of The Dreyfus Corporation, and participates in wrap-fee programs.
Newton Capital Management Limited, a Dreyfus affiliate, provides investment management services under these arrangements as sub-adviser to the Newton
Dreyfus International and Newton Dreyfus Global Equity portfolios managed by MBSC Securities Corporation. The Dreyfus Corporation and Newton are both
part of BNY Mellon, the corporate brand of The Bank of New York Mellon Corporation.
© 2016 MBSC Securities Corporation
DSA-NGEIG-0316