Investment Governance Meeting Summary – 28 September 2021

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 10 June 2021.

Global equities were volatile in May but posted positive returns. After weaker than expected US jobs data dampened tapering concerns, proving constructive for equities, stronger than expected US inflation data dented markets in the following week. However, the Federal Reserve reassured markets that inflation is transitory, encouraging equities back towards all-time highs. Given strong equity performance over the last three quarters, we tempered our equities overweight and increased our positive tilt to commodities, which benefit in a global recovery. We remained overweight in global high yield bonds, underweight gilts and corporate bonds, and extended our underweight in commercial property.

Fund Review

Governed Portfolios

Number of Governed Portfolios outperforming benchmark 1 year 1/9
3 years 9/9
Since launch  9/9
Number of Governed Portfolios within target volatility ranges 9/9
  • All the Governed Portfolios were within their 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 target range – Income Risk Metric 5/5
Number of GRIPs within target range – Fund Risk Metric 5/5

All portfolios remain within their target ranges for the income risk metric, with GRIP 2 being amber as it nears it’s upper limit. Sustainability scores have decreased slightly from last quarter due to a fall in expectations of future returns for some assets.
The fund risk metrics for all GRIPs are within tolerance, with GRIP 2 flagging amber. This is similar to last quarter.

 OverweightNeutralUnderweight
Equities down arrow    
Property     down arrow
Commodities up arrow    
High Yield no change    
Gilts     up arrow
Index Linked     up arrow
Corporate Bonds     up arrow
Absolute Return Strategies (including cash)     up arrow

Global equities were volatile in May but posted positive returns. After weaker than expected US jobs data dampened tapering concerns, proving constructive for equities, stronger than expected US inflation data dented markets in the following week.

However, the Federal Reserve reassured markets that inflation is transitory, encouraging equities back towards all-time highs. Given strong equity performance over the last three quarters, we tempered our equities overweight and increased our positive tilt to commodities, which benefit in a global recovery. We remained overweight in global high yield bonds, underweight gilts and corporate bonds, and extended our underweight in commercial property.

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