Investment Governance Meeting Summary – 1 December 2017

The Investment Advisory Committee (IAC) meet every quarter to review our Governed Range and funds.
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Strategic asset allocation

  • SAA changes were made to the GRIPs in October and the new risk metrics have been implemented.
  • No SAA changes were recommended for the Governed Portfolios.

Tactical asset allocation

  • Last change made on 16 November 2017.
  • RLAM has marginally trimmed our overweight position in High Yield and added to commodities at the margin although we remain neutral in this asset. 
  • We have maintained a small overweight position in equities, high yield and corporate bonds. We are underweight in Absolute Return Strategies (inc. cash), Gilts and Index Linked Bonds. Property and Commodities exposure continues to be kept in line with the benchmark.

Fund review

  • 3 funds under review
  • 18 RLAM funds on watch
  • 8 Matrix funds on watch

Governed Portfolios

Number of Governed Portfolios outperforming benchmark 1 year 8/9
3 years 6/9
Since launch 7/9
Number of Governed Portfolios within target volatility ranges 9/9
  • Governed Portfolio 7 is marginally below benchmark over 1yr and Governed Portfolio 1, 4 and 7 are below benchmark over three years.
  • All of the Governed Portfolios are outperforming over five years. Only Governed Portfolios 4 and 7 are underperforming since launch.
  • Absolute returns remain very strong. 
  • All nine Governed Portfolios remain within their projected target volatility ranges. 

Governed Retirement Income Portfolios

Number of GRIPs outperforming benchmark 1 year 5/5
3 years 5/5
Since launch 5/5
Number of GRIPs within short-term risk measure 5/5
Number of GRIPS within long-term risk measure 5/5

*For more information on the risk metrics please see leaflet“Managing Risk in GRIPs”

All five GRIPs continue to outperform over one, three and five years and also since launch.


Tactical strategy

High Yield    
Index Linked    
Corporate Bonds    
Absolute Return Strategies (including cash)    

  • TAA effects contributed positively over Q3 as performance benefited from an increased overweight in Equities, funded out of Fixed Income and Cash. Both Commodities and Property were maintained around benchmark during the quarter.


  • Regional positioning within Equities benefited from an overweight stance in EM and Europe, whilst the overweight in Japan detracted in Sterling terms after a rally in the Sterling Yen cross rate. Within the UK equity allocation, the mid and small cap bias continued to contribute positively over 2017 as UK large cap stocks underperformed on currency strength.


  • In Fixed income, the outperformance of the overweight Global High Yield allocation in Q3 contributed positively to performance as the asset class extended outperformance against both Investment Grade Credit and the negative return for UK Gilts during the period.

The following funds will be subject to action prior to the next IAC meeting:

  • RLP US Specialist (JPM US)

It remains challenging to source an active fund in this space and IAC have requested a widening of the scope and investment style before a decision is made.

  • RLP UK Core Plus (Schroder Core UK Equity)

The fund is underperforming over all time periods. We have held two interviews with the investment team over the last 18 months and had taken comfort from a turnaround in short-term performance however the fund has dipped below benchmark again this quarter over 1, 3 and 5 years. The fund is not currently recommended by Morningstar. IAC approved the proposal to replace this fund and identify a more suitable replacement at the next IAC meeting.

  • RLP UK Core Plus (Schroder UK Equity)

The fund is underperforming over 1 and 3 years although not to the same extent as the Core UK Equity fund. It sits in the same sector as the Core UK Equity and is not currently recommended by Morningstar. IAC approved the proposal to replace this fund and identify a more suitable replacement at the next IAC meeting.

The following funds are under review:

  • RLP UK Small Cap Specialist (Investec UK Smaller Companies)
  • RLP UK Specialist (Artemis UK Special Situations)
  • RLP UK Specialist (Schroder UK Alpha Plus)
  • RLP Europe Core Plus (Fidelity European Blended)
  • RLP Japan Core Plus (Schroder Tokyo)
  • RLP Japan Specialist (Invesco Perpetual Japan)
  • RLP Emerging Markets Specialist (First State Global Emerging Markets Leaders)
  • RLP Asia Pacific Core Plus (First State Asia Pacific Leaders)




Last updated: 20 Dec 2017

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