Investment governance

Our governance promise ensures we take a proactive role in the governance of our investment proposition.
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We believe all investment options should be monitored on a regular basis and through strong governance we can help to ensure they deliver in line with their investment objectives.

That’s why all of our investment options have a formal review process, at no extra cost.

At the heart of this is our Investment Advisory Committee (IAC).

Find out more about our Governance Promise.

View a copy of the Investment Advisory Committee Terms of reference

About the IAC

The IAC is made up of five pension and investment experts, three from the Royal London Group and two independent experts:

  • James McCourt, Chief Risk Officer, Royal London Group
  • Piers Hillier, Chief Investment Officer, Royal London Asset Management
  • Ewan Smith, Director, CEO Office
  • Candia Kingston, Independent Chairperson
  • JB Beckett – Independent Representative

They're committed to providing an ongoing formal review process for our investment proposition helping you deliver an ongoing, compliant service and peace of mind to your clients.

Meetings are held on a regular, usually quarterly basis to review our Governed Range and funds. The review process focuses on taking a long-term view to ensure investment decisions are made in our investor’s best interests and cover the following types of questions:

  • What is the best blend of assets to meet our customers’ objectives?
  • How should we change the asset mix to respond to changes in the economic outlook?
  • The long-term fundamentals for an asset class have changed, should the best asset mix change?
  • There has been a change of fund manager, would it be best to switch funds?
  • Should the amount invested in UK and overseas equities be changed?

We understand that real governance needs to be transparent so you can see what action we’ve taken and why.

To help the committee to make these decisions, they review reports and market commentary from –

  • Morningstar Investment Management Europe Limited – fund reports
  • Moody’s Analytics – comprehensive risk report
  • Royal London Asset Management – market commentary

To find out more about our members download The Investment Advisory Committee leaflet. 

 Latest meeting minutes


There have been three tactical changes in the last quarter:

There were three tactical changes in Q1;

  • January: Global equities rose again in December despite Covid-19 case numbers increasing and renewed restrictions in many countries, boosted by the approval of the first vaccine and the start of vaccination programmes as well as the $900bn US fiscal package and last-minute Brexit deal. With increased confidence in a ‘return to normal’ later in the year, we have increased our overweight positions in global equities, global high yield bonds and commodities, funded by moving more underweight in commercial property and cash. Otherwise, we remained moderately underweight in gilts and overweight in investment grade corporate bonds
  • February: Global equities marked time in January following strong performance, impacted by viral mutations and extended lockdowns. However, the positive start for vaccination programmes increased confidence in a return to more normal conditions later this year. In the meantime, the $1.9trn fiscal package proposed by the Biden administration should boost the US economic recovery. We used market weakness to add to our overweight in equities by moving more underweight in cash and gilts, and also added further to commodities. Otherwise, we remained overweight in global high yield and neutral in investment grade corporate bonds and underweight in commercial property.
  • March: The success of vaccination programmes and declining Covid-19 case numbers in the US and Europe fuelled expectations of a strong economic recovery this year, driving positive global equity returns. Meanwhile, anticipation of significant US fiscal stimulus raised concerns about inflation causing global bond yields to rise. Due to short-term market volatility we have reduced our overweight exposures to equities, commodities, corporate bonds and global high yield bonds. We also moved further underweight in gilts. This benefited our cash allocation, which moved less underweight. The underweight exposure to commercial property remained unchanged.

We were constructive on global equities through the quarter, as global vaccine distribution picked up pace, and the new US President Biden raised prospects of significant fiscal stimulus, which was duly delivered. Given this, we remained overweight equities but in March were slightly less overweight than at the start of January, having taken some profits. We built a slight overweight to US equities, as potential market volatility caused by rising bond yields made the US look a good defensive option, especially relative to European markets which stumbled on poor vaccine distribution. Due to the ongoing rotation towards value-oriented sectors we also and moved overweight US financials and energy through February. We maintained an underweight in Pacific ex. Japan throughout the quarter and built an overweight in Japanese equities, having started from a neutral position in January, as we viewed a weak yen as positive for exports in Japan. We remained positive on emerging markets, which offer better long-term growth prospects.

In depth



There have been three tactical changes in the last quarter:

There were three tactical changes in Q4;

  • Global equities were weaker in September, although UK-based investors were helped by sterling weakness. Sentiment was affected by the slowdown in the economic recovery; rising Covid-19 cases in the UK, Europe and the US, which led to further social distancing measures and local lockdowns; and increased political risks with the UK-EU trade negotiations and US elections. While low interest rates and fiscal stimulus will ultimately support equities, we further reduced our overweight position. We remained overweight in global high yield bonds and commodities, more neutral in gilts and investment grade credit, and underweight in commercial property and cash.
  • Global equities were weaker in October, reflecting the impact of renewed national lockdowns in the UK and Europe, rising Covid-19 cases in the US and increased political risks. However, Joe Biden’s election as President of the US, but without a Senate majority, and positive trial data for a potential Covid-19 vaccine boosted investor sentiment. We have increased the modest overweight in equities and the overweight in global high yield bonds, funded by reducing the holdings of gilts, investment grade credit and cash. We remained overweight in commodities and underweight in commercial property and cash.
  • Global equities rose strongly in November following the US elections and positive Covid-19 vaccine trial data. Investors were reassured by the absence of US political unrest. Likewise, the possibility of a successful vaccine rollout and ‘return to normal’ next year boosted sentiment. While concerned about no agreement being reached yet on a UK-EU trade deal, shorter-term Covid-19 spikes in the US and rising geopolitical risks in the Middle East, we have increased our overweight in global equities and in global high yield bonds, funded by reducing gilts, bonds and cash. We remain overweight in commodities and underweight in commercial property.

We had moved underweight in Europe (ex-UK) in the third quarter as Covid-19 cases picked up and local lockdowns and travel restrictions were imposed. Against this we had started to reduce the underweight in the UK, which had been a long-term underperformer hampered by heavy resource and financials sector weightings, and which was slower to exit lockdown than many other countries. However, with several scenarios in which the UK could outperform in a global recovery, particularly once there was clarity around the trading terms or otherwise with the EU, we felt it was time to close the underweight and we ended the year slightly overweight.

In depth



There have been three tactical changes in the last quarter:

There were three tactical changes in Q3;

• In June, equities had recovered since March, but were marking time over warnings from central banks about long-term economic damage, particularly to the labour market, and increasing Covid-19 cases in the US. Although data continued to suggest that economies were recovering, this remained virus dependent. Following the strong performance of global stockmarkets and with the risk of renewed lockdowns in the US and elsewhere, we slightly reduced equities, but remained modestly overweight. We increased our small overweight in gilts and remained overweight in global high yield credit. We were underweight in UK commercial property as weightings had drifted lower due to the Property fund suspension.

• Global equity returns were positive in July, although UK-based investors were impacted by sterling strength. While there were renewed spikes in Covid-19 cases, these were managed with travel restrictions or local lockdowns, otherwise, data suggested that leading economies were recovering reasonably well. Central banks maintained low interest rates and governments were committed to fiscal stimulus. In August, to reflect this positive environment, we increased our overweight in equities and moved overweight in commodities. We remained overweight in investment grade and global high yield credit, but cut gilts to around neutral. We also remained underweight in UK commercial property and cash.

• Global equities delivered strong returns in August, and although Covid-19 cases rose in Europe and the UK, which led to travel restrictions and local lockdowns, the global economy continued to recover, albeit at a slower rate. Low interest rates and fiscal stimulus supported this. Following the strong bounce in equity markets, we slightly reduced our overweight given ongoing economic and political risks. We increased our overweight in commodities, given the inflation protection they provide, and trimmed the overweight in fixed income. We remained underweight in UK commercial property and cash.

• During the quarter, we tactically increased our exposure to Japanese equities and also moved underweight in Europe (ex-UK). In late August, following the strong performance of global equities since March, we slightly reduced our equities exposure, particularly in the US. Against this, we started to reduce the underweight in UK equities. These positions generally benefitted performance as Japanese equities performed well in August and September, contrasting Europe (ex-UK). The UK, however, remained weak, delivering negative returns.

In depth


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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. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and pensions. Registered in England and Wales number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL.