‘Star’ fund managers may no longer hold the allure they once did for investors but, in the context of his degree in astrophysics at least, Paul Flood would certainly make an honourable exception. For the head of mixed assets investment at the BNY Mellon-owned Newton Investment Management, that grounding has helped inform a scientific rigour to navigating unpredictable markets and a fresh approach to the art of multi-asset investing.
With a pedigree dating back more than three decades, the Newton multi-asset team is one of the longest-established in an increasingly saturated market. They currently offer a stable of 12 multi-asset funds, including the popular £9.4bn Real Return portfolio, while, for his part, Flood is lead manager on the £700m Multi-Asset Income and £600m Multi-Asset Diversified Return strategies.
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Flood sees a number of points of differentiation for the team as multi-asset managers – the first being an understanding that different asset classes present different risks at various points in the cycle, from which it follows a permanent allocation to specific asset classes is unlikely to deliver a consistent return. “It’s about the right asset class at the right time,” he says.
The team goes one step further, judging each security on its individual characteristics, rather than the asset class with which it is nominally aligned. They will look across the capital structure for the best combination of risk and reward – for example, during the recent ‘Trussonomics’ crisis, the group swapped British American Tobacco equity for its bonds, where yields spiked out to 9%.
Read the whole article in the July/August issue of Portfolio Adviser
