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BNYM Walter Scott International Stock ADR Strategy

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Overview

Why Invest in this Strategy?

  • Seeks to invest in companies with attractive fundamental business strengths and the potential for compound growth
  • A high-conviction portfolio typically comprised of 40-60 stocks
  • Invests exclusively in non-U.S. companies
  • May provide diversification benefits to portfolios invested predominantly in U.S. stocks
  • Portfolio built bottom-up with a focus on investing in individual businesses

Strategy Assets
(Millions)

$85,947  As of 03/31/24

PE RATIO
(1-YEAR FORWARD)

23.17  As of 03/31/24

PB RATIO
(1-YEAR FORWARD)

4.20  As of 03/31/24

Return on
Equity (ROE)

15.68% As of 03/31/24

Median
Market Cap
(billions)

$44.66  As of 03/31/24

Weighted AVG.
Market Cap
(billions)

$159.57  As of 03/31/24

EPS Growth
(5-Years)

8.31% As of 03/31/24

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).

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

Walter Scott & Partners
Year Founded: 1983
Newton Investment Management Logo

Walter Scott & Partners Limited (“Walter Scott”), an Edinburgh, Scotland-based money manager is a subsidiary of BNY Mellon. Since its inception in 1983, the firm has been committed to global equity investing and aims to deliver a superior client experience to pension funds, endowments, foundations, and individual investors, worldwide.

Investment Philosophy
Walter Scott believes returns derived from investing in the shares of a company will reflect the internal wealth generated by that business. Walter Scott invests in companies whose fundamental strengths offer the potential for compound growth.

  • Proprietary Process

    The team conducts disciplined, rigorous, in-house company research following a proprietary process.

  • Team Approach

    Walter Scott’s investment process is based on thorough in-house investment research and collaborative decision making. The firm’s culture and structure rests upon such collaboration; an approach that has been proven over more than 35 years.

  • Long-term Investment Horizon

    A buy-and-hold approach focused on the potential for compound growth, free from short-term distractions.

Portfolio Managers

  • Roy Leckie

    Roy Leckie

    Years at the firm: 28

    Years managing strategy: 4

    Years in industry: 28

  • Charlie Macquaker

    Charlie Macquaker

    Years at the firm: 32

    Years managing strategy: 4

    Years in industry: 32

  • Jane Henderson

    Jane Henderson

    Years at the firm: 28

    Years managing strategy: 4

    Years in industry: 28

  • Maxim Skorniakov

    Maxim Skorniakov, CFA

    Years at the firm: 20

    Years managing strategy: 1

    Years in industry: 20

  • Fraser Fox

    Fraser Fox, CFA

    Years at the firm: 20

    Years managing strategy: 1

    Years in industry: 20

NEWS & VIEWS

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Performance

Performance

  • Display Net data
  • Display Gross data
  • Monthly
  • Quarterly
As of 02/29/24
Annualized Returns
Inception Date YTD 1YR 3YR 5YR 10YR SINCE INCEPTION
BNYM Walter Scott International Stock ADR Strategy 05/01/20 5.24 4.71 20.22 16.61 4.52 1.38 - - - - 9.58 6.30
Walter Scott EAFE Equities Composite 07/01/85 4.20 3.67 17.96 14.42 4.16 1.04 9.37 6.09 7.88 4.65 10.65 7.33
MSCI EAFE® Index N/A 2.42 2.42 14.41 14.41 4.45 4.45 6.77 6.77 4.39 4.39 -
As of 12/31/23
Annualized Returns
Inception Date YTD 1YR 3YR 5YR 10YR SINCE INCEPTION
BNYM Walter Scott International Stock ADR Strategy 05/01/20 20.72 17.10 20.72 17.10 1.80 -1.25 - - - - 8.52 5.27
Walter Scott EAFE Equities Composite 07/01/85 19.83 16.24 19.83 16.24 1.77 -1.29 10.24 6.94 7.24 4.03 10.58 7.26
MSCI EAFE® Index N/A 2.42 2.42 14.41 14.41 4.45 4.45 6.77 6.77 4.39 4.39

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 Walter Scott International Stock ADR Composite (inception: 5/1/2020) created by BNY Mellon Securities Corporation (“BNYMSC”). Net returns assume the reinvestment of dividends, and are net of a 3.0% annual account advisory fee. “Pure” gross-of-fees returns are supplemental to net-of-fees returns, do not reflect the deduction of wrap fee portfolio program fees. If fees were included, returns would have been lower. The performance presented does not mean that any investor will receive such performance, and such performance could be better or worse than the performance presented here.

Returns for less than one year are not annualized.

Download Most Recent BNYM Walter Scott International Stock ADR Composite GIPS Performance Report for all GIPS Disclosure.

Since the Strategy only has short-term performance, also provided is the Walter Scott EAFE Equities Composite ("Institutional Composite") performance as supplemental information.

BNYMSC believes that the Institutional Composite is substantially similar to the BNYM Walter Scott International Stock ADR Strategy (the “SMA Strategy”). BNYMSC further believes that the historical performance of the Institutional Composite presented is relevant to potential investors considering retaining BNYMSC because of BNYMSC’s use of the substantially similar model employed by Walter Scott. The performance presented of the Institutional Composite is not the performance of BNYMSC.

Net of fees performance of the Institutional Composite 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 both in the Institutional Composite’s gross of fees performance and the 3% model wrap fee. Additional information regarding the fee schedule is available upon request.

Download Most Recent Walter Scott EAFE Equities Composite GIPS Performance Report for all GIPS Disclosures.

The benchmark for the Strategy and Composite is the MSCI EAFE Index, which is a free float-adjusted, market capitalization-weighted index that is designed to measure the equity market performance in developed markets, excluding the United States and Canada. While the MSCI EAFE Index does not contain any ADRs, the BNYM Walter Scott International Stock ADR Strategy wrap fee portfolio are primarily composed of ADRs and shares of DTCC-eligible securities of international companies, excluding the U.S. Benchmark performance is net of withholding taxes using the highest tax rates applicable to non-resident individual investors. An investor cannot invest directly in any index.

Calendar Year Performance

  • Display Net data
  • Display Gross data

    Strategy Inception Date: May 1, 2020. Composite Inception Date: July 1, 1985.

    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 Walter Scott International Stock ADR Composite (inception: 5/1/2020) created by BNY Mellon Securities Corporation (“BNYMSC”). Net returns assume the reinvestment of dividends, and are net of a 3.0% annual account advisory fee. “Pure” gross-of-fees returns are supplemental to net-of-fees returns, do not reflect the deduction of wrap fee portfolio program fees. If fees were included, returns would have been lower. The performance presented does not mean that any investor will receive such performance, and such performance could be better or worse than the performance presented here.

    Returns for less than one year are not annualized.

    Download Most Recent BNYM Walter Scott International Stock ADR Composite GIPS Performance Report for all GIPS Disclosure.

    Since the Strategy only has short-term performance, also provided is the Walter Scott EAFE Equities Composite ("Institutional Composite") performance as supplemental information.

    BNYMSC believes that the Institutional Composite is substantially similar to the BNYM Walter Scott International Stock ADR Strategy (the “SMA Strategy”). BNYMSC further believes that the historical performance of the Institutional Composite presented is relevant to potential investors considering retaining BNYMSC because of BNYMSC’s use of the substantially similar model employed by Walter Scott. The performance presented of the Institutional Composite is not the performance of BNYMSC.

    Net of fees performance of the Institutional Composite 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 both in the Institutional Composite’s gross of fees performance and the 3% model wrap fee. Additional information regarding the fee schedule is available upon request.

    Download Most Recent Walter Scott EAFE Equities Composite GIPS Performance Report for all GIPS Disclosures.

    The benchmark for the Strategy and Composite is the MSCI EAFE Index, which is a free float-adjusted, market capitalization-weighted index that is designed to measure the equity market performance in developed markets, excluding the United States and Canada. While the MSCI EAFE Index does not contain any ADRs, the BNYM Walter Scott International Stock ADR Strategy wrap fee portfolio are primarily composed of ADRs and shares of DTCC-eligible securities of international companies, excluding the U.S. Benchmark performance is net of withholding taxes using the highest tax rates applicable to non-resident individual investors. An investor cannot invest directly in any index.

    Portfolio Asset Allocation

    Portfolio

    As of 03/31/24
    Composition Allocation
    Novo Nordisk - ADR 4.41
    Taiwan Semiconductor - ADR 4.37
    ASML 4.25
    Hermes International - ADR 3.74
    Air Liquide - ADR 3.71
    LVMH - ADR 3.70
    Ferrari 3.50
    L'Oreal - ADR 3.39
    SMC Corporation - ADR 3.29
    Compass Group - ADR 2.81

    Asset Allocation

        Source: Walter Scott. 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 subject to market, market sector, market liquidity, issuer, and investment style risks 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. Investing in foreign denominated and/or domiciled securities involves special risks, including changes in currency exchange rates, political, economic, and social instability, limited company information, differing auditing and legal standards, and less market liquidity. These risks generally are greater with emerging market countries. American Depositary Receipts (ADRs) do not eliminate the currency and economic risks for the underlying shares in another country. ADRs are subject to many of the same risks as the foreign securities to which they relate.

        Risk Metrics

        As of  02/29/24  3-Year trailing Standard Deviation Alpha Beta R-Squared Sharpe Ratio Tracking Error Information Ratio
        BNYM Walter Scott International Stock ADR Strategy
        		18.63 3.17 1.05 84.87 0.16 7.25 0.39

        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 MSCI ACWI ex USA 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 Information

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        Walter Scott investing for the Long Term - Brochure
        Single Philosophy Three Ways to Access
        Investment Opportunities Abroad - Whitepaper
        Walter Scott Celebrating 40 Years

        PRODUCT MATERIALS

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        BNYM Walter Scott International Stock ADR Strategy - Investment Report Download
        BNYM Walter Scott International Stock ADR Strategy - Presentation Download
        BNYM Walter Scott International Stock ADR Strategy - Top 10 Rationale Download
        BNYM Walter Scott International Stock ADR 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.

        Walter Scott & Partners Limited (“Walter Scott”) is an investment management firm authorized and regulated in the United Kingdom by the Financial Conduct Authority in the conduct of investment business. Walter Scott and BNYMSC are subsidiaries of the Bank of New York Mellon Corporation.

        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-287641-2022-07-22