Investment governance

Our governance promise ensures we take a proactive role in the governance of our investment proposition.
Listen to our podcast

Listen to our podcast with our IAC’s Independent Chairperson Candia Kingston.

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, Interim Chief Executive Officer, Royal London Intermediary
  • 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 five tactical changes in Q2;

• The disruption caused by the coronavirus pandemic caused turmoil in financial markets in March, exacerbated by the collapse of oil prices. Government and central bank stimulus is positive, but with limited visibility of the scale of the health crisis and its impact on the global economy, we have reduced our risk weightings. We’ve trimmed our overweight in equities after the rally and moved further underweight in commodities. We’ve also reduced the overweight position in global high yield and corporate bonds, reducing the underweight in gilts. The property weighting has increased however this is as a result of the impact of the property fund suspension rather than a tactical decision.

• Disruption from the coronavirus pandemic caused turmoil in financial markets in March, which was exacerbated by oil prices collapsing. Very significant government and central bank stimulus packages have helped markets to recover somewhat. However, without visibility of the length of the crisis and its impact on the global economy, we remain relatively cautious. We are moderately overweight equities and global high yield bonds, given huge monetary and fiscal policy responses being supportive, but have moved further underweight in commodities as demand is weak. We are around neutral in commercial property for the diversification benefits this asset class gives to portfolios.

• Tactical positioning generally remains as the same as 16 April 2020 however a small reduction was made to the equity overweight using the drift of the portfolios and an adjustment was made to manage the portfolios exposure to the currently suspended property fund.

• Risk assets generally recovered in April, despite the dire economic data resulting from the lockdown, as investors responded to the unprecedented fiscal policy support from governments and monetary policy easing from central banks. Lower bond yields and reduced inflation expectations supported continued outperformance by high-quality growth stocks. With the strength in global equities, we have trimmed our overweight position slightly, while taking some profits by reducing our underweight in commodities. We maintained our exposure to investment grade and high yield credit; whilst adding to gilts and indexed linked bonds. Commercial property exposure has drifted further underweight.

• Risk assets recovered further in May. Equity investors continued to look through the short-term effects of the lockdown on companies, taking reassurance from the unprecedented financial support packages from governments and central banks. Leading financial data suggested that the global economy will rebound quickly, although this will depend on Covid-19 remaining under control. We’ve added to equities, going further overweight, and trimmed our underweight in commodities to reflect this optimism. These changes are mainly funded from cash. We remain overweight short duration global high yield credit and commercial property exposure has drifted further underweight.

During the quarter, we continued to take an active approach to tactical asset allocation with a view to generating returns irrespective of market direction. Having scaled back our risk exposure when the crisis unfolded in February and March, we retained a modest overweight in global equities as the second quarter started because of the huge monetary and fiscal stimulus packages and because public health experts were starting to talk of the virus impact peaking, which would lead to lockdowns being eased. We were overweight US equities (including the technology sector) given the relatively defensive nature of the market; and moderately overweight emerging markets, potentially a safer haven as the virus appears to be under control in China. We were underweight UK equities, a long-term underperformer hampered by heavy resource and financials sector weightings.

In depth



There have been three tactical changes in the last quarter:

There were three tactical changes in Q1;

  •  Global equities continued to rise in December as the US and China trade tensions eased and the UK general election delivered a strong parliamentary majority, reducing political uncertainty. There were further signs that the global economic slowdown was bottoming out. While inflation remained low, it has picked up slightly with higher oil prices, which may have constrained central bank flexibility. We added to commodities out of government bonds, partly to hedge against increased geopolitical risk and partly against some inflationary pressures. We also added slightly to our overweight position in high yield bonds.
  • After a benign start to 2020, the coronavirus outbreak shook global financial markets in late January. World equities delivered negative returns for sterling investors in the short term. Economic growth forecasts for China had been cut sharply for the first quarter, but the authorities have introduced stimulus measures and the virus impact could have been short lived. We bought the dip in equity markets as they looked to be overly pessimistic on the economic impact of the outbreak. We added to global high yield bonds, while moving further underweight in gilts and trimming commodities to neutral.
  • Stock markets declined sharply in reaction to the coronavirus outbreak. We reduced equity exposure in view of further downside risk to the world economy, but we retained a small overweight as we see this shock as ultimately temporary - investor sentiment was extremely depressed and valuations were more attractive. We also moved underweight commodities. We added to government bonds and commercial property, and increased corporate and global high yield bonds at wider spreads as we expected them to offer resilience.

During the quarter, we continued to take an active approach to tactical asset allocation with a view to generating returns irrespective of market direction. As the virus spread rapidly outside China, we took exposure down to a broadly neutral position to reflect a high level of uncertainty. We also increased our exposure to government bonds, while trimming global high yield exposure. We retain a position in short duration global high yield, a relatively defensive strategy. Lastly, we have minimal commodity exposure, having sold ahead of the crisis.

In depth


There have been two tactical changes since the last meeting:

  • Global equities rose again in October in local currency terms as investors focused on the supportive monetary policies of central banks and US-China trade talks moved towards an agreement. Given inflation remains muted, we expect lower interest rates to trigger a mini cyclical upswing. Having been broadly constructive on the outlook for stocks all year, despite mixed economic data; we have increased our overweight position in equities. In addition, we have increased our allocations to commodities and global high yield bonds. Against this, with bond yields remaining close to historical lows, we have further reduced our holdings of government bonds.

  • Global equities rose again in November as investors focused on the accommodative monetary policies of central banks and early signs that global growth is stabilising. Given muted inflation, interest rate cuts in the US and other countries are positive for risk assets as the global economy picks up. However, stock markets are always vulnerable to political setbacks, such as US-China trade deal delays or Middle Eastern tensions. While remaining constructive on the outlook for equities, we have taken some profits and reduced our overweight position. We have also reduced our allocation to commodities, building up cash to buy equities on weakness.

We started the quarter overweight in equities, having taken advantage of seasonal weakness in the summer. While we tactically traded this allocation through the quarter to exploit valuation opportunities, stocks should continue to outperform bonds over the next year or two and we remain constructive on equities with an overweight allocation. While trade issues and geopolitical risk could cause short-term setbacks, we are primed to buy on any setback in global stock markets or on further evidence of economic recovery.

In depth

This website is intended for financial advisers only and shouldn't be relied upon by any other person. If you are not an adviser please visit

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.