Investment governance

Real governance needs to be transparent so you can see what action we've taken and why. This should give you and your clients peace of mind that we're looking after their investments.

The Investment Advisory Committee (IAC) meet every quarter to review our Governed Range and funds. Highlights from the most recent meetings can be found below.

Details of previous IAC meetings can be found on the governance meeting updates archive.

1 March 2018 - Governance meeting update
  • There have been two tactical changes since the last meeting. The change in January added to commodities and marginally to high yield bonds, reducing our exposure to bonds and cash. In February, we increased our positions in equities and commodities largely out of bonds where available, property otherwise. We also deepened our underweight position in fixed income in favour of cash. There were no changes to the strategic asset allocations.
  • Overweight positioning in equities was maintained in Q4 against a backdrop of accelerating global growth indicators and relatively subdued inflation data releases. Underweight positioning in fixed income through the quarter was increased marginally in November as the interest rate outlook grew slightly less benign.
  • Given longer term positive economic fundamentals and with interest rates not expected to rise sharply in the next year at least, we remain ready to buy stocks on dips in the market.
1 December 2017- Governance meeting update
  • There have been three tactical asset allocation changes since the last IAC meeting in August. Strategic Asset Allocation changes were made to the GRIPs in October and the new risk metrics implemented. No Strategic Asset Allocation changes were recommended for the Governed Portfolios.
  • There are signs that growth is picking up, against a backdrop of loose monetary policy and low inflation. Against such a backdrop, central banks are unlikely to tighten in a meaningful way; this is positive for stocks and high yield, where we remain overweight. With seasonality now positive, we are likely to buy dips in stock markets rather than sell rallies. We’ve marginally increased our underweight in bonds and taken some profits in high yield. We have added to commodities at the margin.
29 August 2017- Governance meeting update

Highlights:

  • There have been three tactical asset allocation changes since the last IAC meeting in June. The proposed GRIP strategic asset allocations are subject to approval within Royal London’s governance framework.
  • Within the Governed Portfolios, we have marginally increased the portfolios’ exposure to high yield bonds as a lower risk way of gaining corporate exposure with some income, as summer months tend to be more volatile.
  • Geopolitical risks, an unpredictable White House, Brexit negotiations, concerns regarding Chinese growth, could all result in a sell-off in risk assets. However, with global growth and the corporate earnings outlook positive, we would view market dips as likely buying opportunities.

 

13 June 2017 - Governance meeting update

Highlights:

  • There have been three tactical asset allocation changes since the last IAC meeting in February. The most recent change took place on 11 May 2017. New SAA positions for the GRIPs were recommended this quarter.
  • Over the quarter, within the Governed Portfolios, we maintained a small overweight in equities and commodities, added to positions in global high yield while slightly trimming the commodity exposure. Within the GRIPs, we reduced our overweight position in equities and increased exposure to global high yields and gilts.
  • European elections dominated over the last quarter. Politics could still affect markets but we expect a positive investment backdrop for risk assets to continue with global growth stable and interest rates remaining at historically low levels. An unpredictable White House, Brexit negotiations and concerns regarding Chinese growth could result in a sell-off in risk assets over the summer.
Last updated: 27 Mar 2018

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The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London EC3V 0RL.