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 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



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


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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.