BNYM Newton Small Mid Cap Growth Strategy

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Overview

Why Invest in this Strategy?

  • An actively-managed equity strategy focusing on small- and mid-sized companies with high potential for revenue and earnings growth
  • The strategy emphasizes high-quality companies, particularly those with products or services viewed as leaders within their industries
  • Managed by a team of seasoned investment professionals with long histories in their respective industries
  • The team focuses on sustainable growth, targeting companies with strong growth prospects over the next 2 to 3 years

Strategy Assets
(Millions)

$1,925  As of 06/30/24

PE RATIO
(1-YEAR FORWARD)

39.50  As of 07/31/24

PB RATIO
(1-YEAR FORWARD)

5.10  As of 07/31/24

Return on
Equity (ROE)

1.80% As of 07/31/24

Median
Market Cap
(billions)

$8.60 As of 06/30/24

Weighted AVG.
Market Cap
(billions)

$14.13  As of 06/30/24

EPS Growth
(5-Years)

15.19% As of 07/31/24

Strategy Assets captures all assets the investment manager manages in that discipline for all client types.

Price/Earnings Ratio - Price-to-earnings (P/E) is the ratio of the market price of a firm’s common stock to its current (or predicted) earnings per share. Price/Book Ratio - Price-to-book value (P/B) is a ratio used to compare a stock's market value with its book value. It is calculated by dividing the current closing price of the stock by the latest quarter’s book value (assets minus liabilities).

Price/Book Ratio - Price-to-book value (P/B) is a ratio used to compare a stock's market value with its book value. It is calculated by dividing the current closing price of the stock by the latest quarter’s book value (assets minus liabilities).

Return on Equity is the percentage a company earns on its total equity for the time period listed. The calculation is net income divided by end-of-year net worth. The resulting figure is multiplied by 100.

Median Market Cap is the midpoint of market capitalization (market price multiplied by the number of shares outstanding) of the stocks in a portfolio. Half the stocks in the portfolio will have higher market capitalizations; half will have lower.

Weighted Avg Market Cap - Weighted average market cap is the average market capitalization of corporations in a fund or index, weighted by the percentage of the holding in the fund or index.

Earnings per share (EPS) growth is a figure that represents the annualized rate of net-income-per-share growth over the trailing five-year period for the stocks held by a portfolio.

Investment Firm

Newton Investment Management
Year Founded: 1978
Newton Investment Management Logo

With offices in London, New York, Boston, San Francisco and Tokyo, Newton provides discretionary and non-discretionary investment advice to institutional clients, including U.S. and global pension funds, sovereign wealth funds, central banks, endowments, foundations, insurance companies, registered mutual funds, other pooled investment vehicles and other institutions, and, via BNY, to individuals.

Investment Philosophy
We believe the utilization of global investment themes to provide unique market perspective provides a framework that highlights potential investment opportunities that may otherwise be overlooked.

  • Investment Themes

    Our thematic approach helps to identify economic/demographic tailwinds driving faster growth for industries and companies across the economic landscape. This perspective helps illuminate both opportunities and threats that may otherwise be overlooked.

  • Fundamental Research

    The team focuses on stock selection that relies on the accurate identification of a company’s long-term sustainable growth potential, which is critical to long-term price appreciation.

  • Risk Management

    Risk assessment underscores consistent results through proper diversification and discipline through mechanisms such as a stock laggards review, factor analysis and risk reporting.

Portfolio Managers

  • John Porter

    John Porter

    Years at the firm: 8

    Years managing strategy: 5

    Years in industry: 29

  • Miki Behr

    Miki Behr

    Years at the firm: 16

    Years managing strategy: 3

    Years in industry: 24

Performance

Performance

  • Display Net data
  • Display Gross data
  • Monthly
  • Quarterly
As of 07/31/24
Annualized Returns
Inception Date YTD 1YR 3YR 5YR 10YR SINCE INCEPTION
BNYM Newton Small Mid Cap Growth Strategy 05/01/20 -0.56 -2.23 0.65 -2.23 -9.62 -12.21 - - - - 5.41 2.35
US Small Mid Cap Growth Equity Composite 04/01/03 -0.44 -2.11 0.86 -2.03 -9.60 -12.19 6.06 2.96 10.25 6.99 12.51 9.16
Russell 2500® Growth Index N/A 10.26 10.26 11.93 11.93 -1.49 -1.49 8.52 8.52 9.98 9.98 -
As of 06/30/24
Annualized Returns
Inception Date YTD 1YR 3YR 5YR 10YR SINCE INCEPTION
BNYM Newton Small Mid Cap Growth Strategy 05/01/20 -0.39 -1.82 4.75 1.75 -9.70 -12.29 - - - - 5.57 2.50
US Small Mid Cap Growth Equity Composite 04/01/03 -0.40 -1.84 4.74 1.75 -9.72 -12.32 6.45 3.34 9.80 6.55 12.56 9.21
Russell 2500® Growth Index N/A 10.26 10.26 11.93 11.93 -1.49 -1.49 8.52 8.52 9.98 9.98

Sources: BNYMSC and FactSet.

Past performance is no guarantee of future results. Current performance may be lower or higher than the performance quoted. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment.

Please note that the Strategy performance shown represents the performance of the BNYM Newton Small Mid Cap Growth Composite (inception: 5/1/2020) created by BNY Mellon Securities Corporation (“BNYMSC”). Net returns assume the reinvestment of dividends. Through September 30, 2021, net of fees performance is shown using a fee of 3%, which is the historic industry standard highest fee in the wrap account industry. As of October 1, 2021, net of fees performance is shown using a fee of 2.86%, which is the highest annual advisory fee for the strategy. “Pure” gross-of-fees returns are supplemental to net-of-fees returns and do not reflect the deduction of wrap fee portfolio program fees. If fees were included, returns would have been lower.

Download the Most Recent BNYM Newton Small Mid Cap Growth Composite GIPS Performance Report for all GIPS Disclosures.

Since the strategy only has short-term performance, also provided is Institutional Composite performance as supplemental information.

The US Small Mid Cap Growth Equity Composite (“Institutional Composite”) is being shown as representative of the BNYM Newton Small Mid Cap Growth Strategy (“SMA Strategy”). The Institutional Composite is managed by the same investment team using a substantially similar investment process that is used for the SMA Strategy. The SMA Strategy is provided on both a discretionary and non-discretionary basis. The Institutional Composite performance presented is not the performance of the SMA Strategy, since BNYMSC did not manage any discretionary assets in the described SMA Strategy prior to April of 2020. The performance presented shows gross returns of the Institutional Composite and thus does not reflect BNYMSC’s investment management fees nor the fees charged by the sponsor of the applicable wrap fee investment program. Although BNY Mellon Securities Corporation, the SMA manager of record, believes that the Institutional Composite is representative of the SMA Strategy, there may be material differences between the Institutional Composite and the SMA Strategy. Net of fees performance is shown using a fee of 3%, which is the historical industry standard in the wrap account industry. Please note that this figure may double count certain transaction expenses that are embedded in the Institutional Composite’s gross of fees performance and in the model 3% wrap fee.

Download the Most Recent US Small Mid Cap Growth Equity Composite GIPS Performance Report for all GIPS Disclosures.

The Strategy and Composite's benchmark in the Russell 2500™ Growth Index. The Russell 2500™ Growth Index measures the performance of the small- to mid-cap growth segment of the U.S. equity universe. It includes those Russell 2500 companies with higher growth earning potential as defined by Russell's leading style methodology. The Russell 2500 Growth Index is constructed to provide a comprehensive and unbiased barometer of the small- to mid-cap growth market. The index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small- to mid-cap opportunity set and that the represented companies continue to reflect growth characteristics. Investors cannot invest directly in any index.

Calendar Year Performance

  • Display Net data
  • Display Gross data

    Strategy Inception Date: May 1, 2020. Composite Inception Date: April 1, 2003.

    Sources: BNYMSC and FactSet.

    Past performance is no guarantee of future results. Current performance may be lower or higher than the performance quoted. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment.

    Please note that the Strategy performance shown represents the performance of the BNYM Newton Small Mid Cap Growth Composite (inception: 5/1/2020) created by BNY Mellon Securities Corporation (“BNYMSC”). Net returns assume the reinvestment of dividends. Through September 30, 2021, net of fees performance is shown using a fee of 3%, which is the historic industry standard highest fee in the wrap account industry. As of October 1, 2021, net of fees performance is shown using a fee of 2.86%, which is the highest annual advisory fee for the strategy. “Pure” gross-of-fees returns are supplemental to net-of-fees returns and do not reflect the deduction of wrap fee portfolio program fees. If fees were included, returns would have been lower.

    Download the Most Recent BNYM Newton Small Mid Cap Growth Composite GIPS Performance Report for all GIPS Disclosures.

    Since the strategy only has short-term performance, also provided is Institutional Composite performance as supplemental information.

    The US Small Mid Cap Growth Equity Composite (“Institutional Composite”) is being shown as representative of the BNYM Newton Small Mid Cap Growth Strategy (“SMA Strategy”). The Institutional Composite is managed by the same investment team using a substantially similar investment process that is used for the SMA Strategy. The SMA Strategy is provided on both a discretionary and non-discretionary basis. The Institutional Composite performance presented is not the performance of the SMA Strategy, since BNYMSC did not manage any discretionary assets in the described SMA Strategy prior to April of 2020. The performance presented shows gross returns of the Institutional Composite and thus does not reflect BNYMSC’s investment management fees nor the fees charged by the sponsor of the applicable wrap fee investment program. Although BNY Mellon Securities Corporation, the SMA manager of record, believes that the Institutional Composite is representative of the SMA Strategy, there may be material differences between the Institutional Composite and the SMA Strategy. Net of fees performance is shown using a fee of 3%, which is the historical industry standard in the wrap account industry. Please note that this figure may double count certain transaction expenses that are embedded in the Institutional Composite’s gross of fees performance and in the model 3% wrap fee.

    Download the Most Recent US Small Mid Cap Growth Equity Composite GIPS Performance Report for all GIPS Disclosures.

    The Strategy and Composite's benchmark in the Russell 2500™ Growth Index. The Russell 2500™ Growth Index measures the performance of the small- to mid-cap growth segment of the U.S. equity universe. It includes those Russell 2500 companies with higher growth earning potential as defined by Russell's leading style methodology. The Russell 2500 Growth Index is constructed to provide a comprehensive and unbiased barometer of the small- to mid-cap growth market. The index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small- to mid-cap opportunity set and that the represented companies continue to reflect growth characteristics. Investors cannot invest directly in any index.

    Portfolio Asset Allocation

    Portfolio

    Download Total Holdings
    As of 07/31/24
    Composition Allocation
    INSPIRE MEDICAL SYSTEMS INC 2.86
    REPLIGEN CORP 2.81
    COSTAR GROUP INC 2.77
    CELSIUS HOLDINGS INC 2.47
    PLANET FITNESS INC CLASS A 2.45
    SAREPTA THERAPEUTICS INC 2.45
    FRESHPET INC 2.31
    INSMED INC 2.28
    EQT CORP 2.23
    ALIGN TECHNOLOGY INC 2.19

    Asset Allocation

        Source: Newton. Top 10 equity weights are based on a representative model account, exclusive of cash. Total model holdings are from the same representative model account, inclusive of cash. Individual accounts may vary.

        Risk Stats

        Main Risks

        All investments involve risk, including loss of principal. Equities are generally subject to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees. Small and midsized company stocks tend to be more volatile and less liquid than larger company stocks as these companies are less established and have more volatile earnings histories.

        Risk Metrics

        As of  06/30/24  3-Year trailing Standard Deviation Alpha Beta R-Squared Sharpe Ratio Tracking Error Information Ratio
        BNYM Newton Small Mid Cap Growth Strategy
        		23.33 -19.78 1.15 77.16 -0.47 11.37 -1.74

        All risk metrics are provided by Morningstar. The index used in the calculations are determined by Morningstar which may not be the strategy’s primary benchmark. The index Morningstar used for this analysis is S&P 500® Index.

        Standard deviation - It is a statistical measure of the degree to which an individual portfolio return tends to vary from the mean, based on the entire population. The greater the degree of dispersion, the greater the degree of risk. In mutual funds, the standard deviation tells us how much the return on the fund is deviating from the expected normal returns.

        Alpha - It is a measure of a security's or portfolio's excess return.

        Beta - It is a measure of a security's or portfolio's volatility, or systematic risk.

        R-Squared - It is a statistical measure that represents the percentage of a fund's or security’s movements that are explained by movements in a benchmark index.

        Sharpe Ratio - It is a risk-adjusted measure that measures reward per unit of risk.

        Tracking Error - is a measure of the volatility of excess returns relative to a benchmark.

        Information Ratio - is a geometric measure of risk-adjusted performance. The Information Ratio is a version of the Sharpe Ratio, but unlike the Sharpe Ratio, the benchmark does not have to be the risk-free return.


        Literature

        Literature

        PRODUCT MATERIALS

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        BNYM Newton Small Mid Cap Growth Strategy - Investment Report Download
        BNYM Newton Small Mid Cap Growth Strategy - Presentation Download
        BNYM Newton Small Mid Cap Growth Strategy - Top 10 Rationale Download
        BNYM Newton Small Mid Cap Growth Strategy - Commentary Download
        GIPS Report

        GIPS Report

        Investors should carefully review and consider potential risks before investing. Please see Main Risks section above for additional information regarding investment risks.

        Separately Managed Accounts (SMAs) are offered by BNY Mellon Securities Corporation (BNYMSC) in its capacity as a registered investment adviser.

        “Newton” and/or the “Newton Investment Management” brand refers to the following group of affiliated companies: Newton Investment Management Limited (NIM) and Newton Investment Management North America LLC (NIMNA). NIM is incorporated in the United Kingdom (Registered in England no. 1371973) and is authorized and regulated by the Financial Conduct Authority in the conduct of investment business. Both Newton firms are registered with the Securities and Exchange Commission (SEC) in the United States of America as an investment adviser under the Investment Advisers Act of 1940. Newton is a subsidiary of The Bank of New York Mellon Corporation.  Newton’s investment advisory businesses are described in their Form ADVs, Part 1 and 2, which can be obtained from the SEC.gov website or obtained upon request.

        This information has been distributed for informational purposes only and should not be considered as investment advice or are commendation of any particular investment, strategy, investment manager or account arrangement and should not serve as a primary basis for investment decisions. Information displayed has been obtained from sources believed to be reliable, but not guaranteed. Please consult a legal, tax or financial professional to determine whether an investment product or service is appropriate for a particular situation. No part of this information may be reproduced in any form, or referred to in any other publication, without express written permission.

        MARK-287705-2022-07-22