Newton Global Dynamic Bond Strategy brochure
The Newton Global Dynamic Bond strategy was launched in 2006 with the aim of capturing different sources of global bond returns in one holistic portfolio. While bond strategies have tended historically to be managed closely against indices, we believe that this approach has inherent flaws.
For example, as companies and governments face financial difficulties, they will often have to issue more debt, thereby becoming a larger constituent of a bond index. We believe that indices should be used as a reference tool that helps to define opportunities, rather than as prescriptive tools for portfolio construction. The strategy was managed originally against a composite of four bond indices (government, high yield, emerging market and investment-grade credit), but more recently we adopted a long-term target return of 1 month LIBOR+2%, which truly reflects the underlying rationale of the strategy.
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