The Investment Clock

The Investment Clock is a tactical asset allocation model that Trevor Greetham, Head of Multi Asset at Royal London Asset Management (RLAM) uses to guide our tactical strategy for our Governed Range.

Latest Investment Clock update - September


Trevor Greetham

The multi asset funds we manage are moderately overweight in equities, we’re overweight commodities including gold and we've continued with our large overweight and global high yield bonds. Our equity exposure is tilted towards the U.S. and emerging markets and away from the UK and Europe and we like technology and we don't like energy. The world economy has recovered quite dramatically from the shutdown in March and April of 2020 but it feels like the recovery is beginning to slow because social distancing measures are still in force. If you look at the investment clock that guides our asset allocation that onset of the corona virus crisis early this year was a deflationary shock. So, you look at the investment clock you'll see it moving to the bottom left hand corner with growth indicators slumping and inflation slumping and that was a really good environment for government bonds which performed very strongly. We had lots of stimulus and eventually we've had a reopening of the world economy as those intense social distancing measures have been eased and that's resulted in the investment clock retracing its steps back up towards the top right hand corner a stronger growth indicators and with commodity prices rising, rising inflation pressures not surprising stock markets and commodity markets have been doing quite well. But it does feel a little bit like we're coming towards an inflection point where the rate of recovery is beginning to slow down. You can see that if you look at things like the Google mobility data that we track, that shows you how much we're all moving around and you'll see that the slump in activity in March and April the recovery around the world over the summer but if you look at the US and particularly you'll see it's flattened out and we think this is a bit like a square root symbol we've been talking about this for a while. A decline or a recovery but then a sideways period where you recover but only so much because certain things are still not possible. The markets are sensing that inflection point. They're also concerned about the US presidential elections some very fractious Brexit negotiations and the blowing off of some of the speculative froth around the technology sector and we expect a bit of volatility in the short term and it's quite important I think to be quite tactical with your equity exposure over this time. We think though things will resolve positively because one way or another we will beat the cave crisis. We'll get through the other end either through gradual immunity or vaccine and throughout this period policy is likely to remain loose if anything policy is likely to remain to loose because policymakers really don't want to err on the side of doing too little stimulus. If you'll see if you'll see fiscal policy makers tighten you'll see monetary policy makers ease for example and I think that monetary ease is going to remain in the system too long because people won't really know that the crisis is over until long after the event and that more inflationary outlook we think plays towards the more diversified asset mix that we run with our portfolios including asset classes like commodities with our slightly higher weighting in UK equities and some of our competitors some of our funds exposed to commercial property. So think quite carefully at the moment about what the recovery from Cambridge will be like it's going to be bumpy in the short term but ultimately we think it's going to be more inflationary and as a result a more diversified asset mix we think makes sense.

How does the clock work?

The clock's horizontal axis, left to right measures inflation while its vertical axis indicates economic growth. In simple terms, the economic cycle moves through waves, from prosperity to decline, with central banks inflating or deflating monetary policy as a means of stabilising activity within the economy.

Investment Clock example

Source: Royal London Asset Management, for illustrative purposes only

Tracking the movement through each of the clock's quadrants: Reflation, Recovery, Overheat and Stagflation, can guide rotation across assets and sectors.

Investment Clock reports

news August 2020 (PDF)
Diversify for an inlationary outlook

news April 2020 (PDF)
Navigating the corona crisis

news January 2020 (PDF)
A new upswing

news January 2020 (PDF)
Bottoming out?

Investment Clock and the Governed Range

The Governed Portfolios and Governed Retirement Income Portfolios (GRIPs) are risk-targeted centralised investment propositions with a strong emphasis on investment governance. The tactical asset allocation of each of these portfolios is delegated to Trevor Greetham by the Investment Advisory Committee (IAC).

Our Investment Advisory Committee (IAC) meets every quarter to review our risk-graded Governed Range and fund range. Read the summary notes from their most recent meetings. 

The Investment Clock is just one of a range of tools that makes our tactical strategy more robust and more active based. It also brings an additional layer of expertise and strengthens the investment process of our Governed Range.

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.