Press Releases

Newton Underlines Long Term Power of Equities

Research shows holding equities is the key to long-term returns

LONDON, 18 August, 2008 — According to research by Newton Investment Management, UK equities continue to be an attractive long-term investment despite the current market volatility.

Research suggests holding UK equities for a period of more than eight years during the last 108 years, has not only produced higher real returns than gilts, but also with lower deviation*. Even during periods of short-term volatility in equities, such as the stockmarket crash of 1929, or the bursting of the tech bubble in 2000, equity market performance has tended to even out over time.

Jeff Munroe, Chief Investment Officer at Newton, comments: "In times of high volatility many investors may consider whether equities remain an appropriate investment vehicle for their savings and pension plans. However, it's a fundamental principle of long-term investing that if you want to achieve higher returns, you must be able to accept higher risk and volatility along the way. This is why investors should be thinking about investing through market cycles and not trying to pick the best time to invest. As hard as it is at certain times, it is advisable to avoid the herd mentality, which inevitably sees investors piling in at the top of the market and selling at the bottom.

"Over the long term, equity markets have proved to be a powerful way of generating income and capital growth. While we are currently witnessing important changes in the contours of financial markets, it is important for investors to consider a long-term investment horizon, particularly where their savings and pension plans are concerned. With increased life expectancy and many people retiring at a later stage, never has provisioning for your retirement been more important."

Newton Investment Management Limited is a London-based global asset management subsidiary of The Bank of New York Mellon Corporation and part of BNY Mellon Asset Management. With assets under management of more than £38 billion, the company provides a broad range of award-winning investment products and services to individuals, pension funds, charities and corporations. News and other information about Newton is available at www.newton.co.uk.

The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has more than $23 trillion in assets under custody and administration, more than $1.1 trillion in assets under management and services $12 trillion in outstanding debt. Additional information is available at bnymellon.com.

*Source: Thomson Datastream and Newton Investment Management, to 31 July 2008.