Investment Governance Meeting Summary – 5 June 2018

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

  • No SAA changes were recommended for the Governed Portfolios or GRIPs.

Tactical asset allocation

  • Last change made on 19th April 2018.
  • Market volatility gave our multi asset funds the opportunity to add significantly to equities at more attractive prices.
  • Underweight positioning in government bonds was sustained through the quarter.

Fund review

  • 13 RLAM funds on watch
  • 4 funds under review
  • 15 Matrix funds on watch.

Governed Portfolios

Number of Governed Portfolios outperforming benchmark 1 year 3/9
3 years 3/9
5 years 9/9
Number of Governed Portfolios within target volatility ranges 9/9
  • All of the Governed Portfolios are outperforming over five years.
  • Long term returns remain very strong.

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

All GRIPs were within the tolerances for their income and fund value risk metrics.

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

Tactical strategy

 OverweightNeutralUnderweight
Equities    
Property    
Commodities    
High Yield    
Gilts    
Index Linked    
Corporate Bonds    
Absolute Return Strategies (including cash)    

  • Overweight positioning in equities was maintained in Q1; market volatility gave our multi asset funds the opportunity to add significantly to equities at more attractive prices. Underweight positioning in government bonds was sustained through the quarter as the interest rate outlook grew slightly less benign.
  • For portfolios with Commodity holdings, overweight exposure was retained given our Investment Clock is in its early ‘overheat’ phase (growth continuing but with more inflation evident) which favours commodities.
  • At the regional equity level, overweights in Japan and Emerging Markets were maintained in the quarter as global growth indicators remained solid; we remained underweight the UK, as it still faces some Brexit uncertainty, and remained cautious on the sustainability of growth in Europe ex-UK. 

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

  • First State Global Emerging Markets Leaders & First State Asia Pacific Leaders

The IAC commented that they were concerned by the effect that last year’s retirement of Angus Tulloch may have had.  They requested a review of the First State matrix funds in light of this change with particular emphasis on continuity planning and investment leadership.

Last updated: 12 Jul 2018

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