Investment Governance Meeting Summary – 22 November 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 9 September 2021.

Global equities reached fresh highs in August despite some mixed global economic data, with short term inflation numbers being most challenging for markets. Bond markets, however, continued to believe that inflation was a transitory issue after reassurance from major central banks.  Commodities and stocks remained strong in August as the global economic recovery continued. We maintained our overweight positions in both global high yield bonds and commodities, but marginally increased the modest positive tilt to equities. The portfolios moved marginally more underweight corporate bonds and increased the underweight in gilts given inflation uncertainty, and maintained the slight 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 up arrow    
Property     no change
Commodities no change    
High Yield no change    
Gilts     down arrow
Index Linked     down arrow
Corporate Bonds     down arrow
Absolute Return Strategies (including cash)     down arrow

Global equities reached fresh highs in August despite some mixed global economic data, with short term inflation numbers being most challenging for markets. Bond markets, however, continued to believe that inflation was a transitory issue after reassurance from major central banks.

Commodities and stocks remained strong in August as the global economic recovery continued. We maintained our overweight positions in both global high yield bonds and commodities, but marginally increased the modest positive tilt to equities. The portfolios moved marginally more underweight corporate bonds and increased the underweight in gilts given inflation uncertainty, and maintained the slight underweight in commercial property.

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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.