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For professional clients only, not suitable for retail clients. This is a financial promotion and is not investment advice. The views expressed are those of the contributors at the date of publication unless otherwise indicated, which are subject to change, and are not investment advice. Issued in June 2021 by Royal London Asset Management Limited, 55 Gracechurch Street, London, EC3V 0RL. Authorised and regulated by the Financial Conduct Authority, firm reference number 141665. A subsidiary of The Royal London Mutual Insurance Society Limited.
“Advisers and their clients should be looking for a broad asset mix that is resilient in a wide range of scenarios”
he growth of responsible and sustainable investing is changing the shape of the investment industry and could prove critical in
supporting the transition to a lower carbon and more socially just world.
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multi asset investing
For Professional Clients only
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Built-in resilience
But does it need to watch its step?
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CLIENTs need a resilient, evolving, and diversified portfolio
Rebuilding portfolio resilience
A renaissance in active management
here has been a sea change in markets over the last year and savers are now facing several headwinds that have not been seen in decades. We have witnessed profound market shifts to a higher
inflation and interest rates environment, largely in response to global central bank monetary and policy changes. This shift requires broader asset class diversification, disciplined active management processes, and a robust framework within which savers can understand any impact on them.
We have come from a record-long US business cycle and more than 10 years of expansion that ended with Covid. Now, the economic backdrop is more akin to the 1970s, with inflation acutely high due to ongoing shocks from the war in Ukraine. Central banks are finally stepping in to contain inflation but are increasingly acknowledging that recession may be difficult to avoid in the process.
In this Spotlight guide from Royal London, Trevor Greetham explains the hidden dangers of passive multi asset investing and the importance of robust active management in the current market environment. Hiroki Hashimoto and Ken Scott explore the benefit of broad portfolio diversification beyond the classic 60/40 equity and bond allocation.
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For Professional Clients only, not for Retail Clients
The Governed Range is designed to navigate the choppy waters of economic uncertainty
Finally, Ryan Medlock explains how Royal London’s multi asset offering, the Governed Range, is designed to deliver long-term, above-inflation growth for savers across the spectrum of risk preferences. He explores the team expertise that has designed the range to help shield savers from high inflation; employ responsible investment as a force for good; and, crucially, offer a layer of impartial governance to boost investor confidence at every step on their investment journey.
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Tougher markets call for active and robust management to navigate economic uncertainty, says Trevor Greetham
My starting point is that not everything that matters can be measured
who has lived with a teenager knows that fast maturation comes with challenges and a few wrong turns.
he world needs responsible and sustainable investing to mature and grow so that it can drive beneficial change more quickly. But anyone
For Mike Fox, Head of Sustainable Investments, the overarching positive change in the last few years is that “responsible and sustainable investing has an influence and cultural acceptance it simply never used to have.”
Ashley Hamilton Claxton, Head of Responsible Investment, has recently been attending broker-arranged conference calls for issuers and says many firms are asking themselves how they can attract the new Environmental, Social and Governance (ESG) oriented investors. “Even the ‘dirty’ companies are realising that this is now affecting capital flows and are reaching out,” she says, though her advice to them is straightforward (see box).
Hamilton Claxton says that a parallel trend is also now clear. “The conversation is moving on from ‘what is the financial ESG risk of my companies or my funds’ to ‘what is their direct impact on sustainability’, in addition to any financial risk implications,” she says. This shift is changing the approach of the Responsible Investment team – who work not just with Fox’s sustainable funds but across RLAM’s investment universe.
“We're thinking more broadly about how we can research, describe and measure the direct impact of large corporations on the world,” she says, “and we’re looking at new information in new ways.”
“But we're buying companies that exist in the real world,” he says, “and to think that you can entirely numericise those companies during the sustainability analysis and attribute no value to the words that provide context to the sustainability numbers is, I think, profoundly wrong.”
Source.
(1) Responsible Investment: A passing fad or a permanent future?, from Royal London
“We risk manage our positions and we will look at them and review them every single day”
“There’s still trouble ahead. Central banks are woefully behind the curve on fighting inflation,” says Trevor Greetham, Head of Multi Asset at Royal London Asset Management (RLAM). “They have been caught out by the persistency of inflation and further inflation shocks, such as the Russian invasion of Ukraine. The danger is they will need to engineer a recession to stop high inflation from becoming embedded,” he says.
tock markets have had a rough start to 2022, as high inflation, late to act central banks, and war in Ukraine are contributing to an unfriendly and volatile environment for investors.
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“In equities, we're tilted towards better value sectors and regions, and are underweight in the expensive technology and consumer discretionary stocks that previously led the bull market,” Greetham says, adding that they are overweight in UK equities which offer particularly good value and provide resilience in a rising inflationary environment.
Greetham’s multi asset team at RLAM is taking a cautious stance positioning within equities across the Governed Range, and other multi asset funds run by the team, and he stresses that with continuing volatility ahead, a disciplined approach to tactical asset allocation is critical. They have benefitted from an overweight position on commodities but have taken profits amid the recent declines. They are relatively cautious on equities and have been underweight on government bonds since late 2020.
Passive investors have been well-rewarded over the bull market with most asset classes rising.
Now, with looming recession, ongoing inflation, and a bear market, that once-friendly backdrop has dramatically changed and investors are left not only navigating a tougher market, but problems that emerge with passive investing.
RLAM believes the economic upswing since the pandemic is likely to end in recession but in the meantime inflation risks remain. Advisers and their clients should be looking for a broadly diversified asset mix that is resilient in a wide range of scenarios, including inflation hedges like commodities and commercial property, and disinflation hedges like government bonds.
In Greetham’s view, it is important to be flexible. “You need to be able to adjust positions tactically as the business cycle evolves.” He adds “While overweighting commodities was extremely useful in the stagflationary conditions of recent months, both commodities and stocks are likely to fall in a recession and we have already started to move money back into government bonds and the more defensive parts of the stock market.”
While active management means changing the structure of portfolios on a continuous basis, disciplined risk control is key. “We want to optimise portfolios for a changing investment backdrop, but it is important to have that continual governance check that the risk level of each portfolio remains right for the investors it is designed for.”
Preparing for a bumpy ride
The hidden dangers of passive multi asset
It is often thought that there is a trade-off between financial performance and sustainability. This has been widely debunked, with studies showing that incorporating environmental, social and governance criteria can deliver financial benefits; both in corporate performance and in the performance of investment portfolios.
The relationship advantage
People who think everyone is responsible for taking action to address the climate crisis
71%
People who feel that the crisis is being addressed
22%
People who feel the way their pension and investments are invested would make a difference
7%
“We are dynamic in the way that we adjust positions as the business cycle evolves”
“During bear market conditions, you've got to be prepared to buy dips from time to time; in the short term, markets can get too panicked. You've also got to be ready to sell rallies, which can be very short-lived. We are dynamic in the way that we adjust positions as the business cycle evolves,” Greetham says.
"The last few times central banks raised interest rates and major economies fell into recession, for example the 1990 oil shock, the dot-com crash of 2000 and the Global Financial Crisis of 2007, we saw 2-3 year bear markets ending only when unemployment rates were close to peaking; unemployment rates are not even rising yet. A sudden drop in inflation could allow central banks to be less aggressive, which might result in a shorter, shallower recession and bear market."
“Passive stock market indices tend to be market capitalisation based. After a long bull market they will have very big weightings in the most expensive, potentially bloated sectors and stocks. They are very exposed to large losses in the technology sector,” says Greetham.
Passive multi asset funds that rebalance regularly to fixed weights in different asset classes have a different challenge.
“With fixed weight rebalancing, you are forever topping up on equities as prices drop in a bear market, maintaining full exposure to the asset class losing you money,” says Greetham, adding that investors will need to have more active asset allocation approach if they are going to avoid feeling every bump.
The Multi Asset team apply a robust asset allocation process which takes shorter term market moves into account for every Royal London multi asset portfolio including the Governed Range.
“We risk manage our positions and we will look at them and review them every single day. When we're changing positions, it often happens through small incremental changes adding up over a week or two as the fundamental outlook shifts. I think it's very important to have that continuous hands-on approach which a lot of frameworks are just not designed for,” says Greetham.
Importance of robust active management
The RLAM Multi Asset team is known for the Investment Clock, a tool linking asset allocation to the business cycle and acknowledging that different asset classes tend to do well at different times.
The investment clock
“I describe the Investment Clock approach as ‘nowcasting’, not forecasting. As the economic picture gradually changes, you move with it. You do not have to bet on something happening in the future,” says Greetham.
The Investment Clock is just one example of the factors that RLAM uses in its decision making. Whilst a useful tactical model for asset allocation between asset classes, it has nothing to say about regional equity allocations, for example. Here, other factors, such as valuation and earnings revisions are key. In all investment decisions, the RLAM team adds skill and judgment to the process, drawing on their experience, supported by asset class experts and external advisors.
In combination, these aspects provide customers a rigorous framework that has provided, since launch in 2009, robust long-term risk adjusted returns. Broad diversification and robust active management will be key to navigate the economic uncertainty ahead.
Inflation rises
Inflation FALLS
Growth MOVES BELOW TREND
Growth MOVES ABOVE TREND
Trevor Greetham, Head of Multi Asset at Royal London Asset Management Trevor leads the team responsible for tactical asset allocation within the Governed range and is a lead fund manager of their multi asset funds
“The language of financial services can be off-putting, and terminology around responsible investing adds another layer of complexity”
Performance
However, it is noteworthy, says Pennells, that some investors don’t even mind if there is a financial trade off: “A high percentage of those who would consider a net zero pension – 47% – actively said they would consider it even if the charges were higher and the investment performance was projected to be lower.”
responsible investment and good governance across all asset classes. Alongside this, we also believe that considering environmental, social and governance (ESG) issues in the investment process can help us deliver better returns for our customers and clients.
LAM is committed to being a responsible investor. This means being a good steward of our clients’ assets and promoting
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Investors need broader portfolio diversification to help create resilience in different market conditions and at every step of the saver’s journey, say Hiroki Hashimoto and Ken Scott
“Customers trust us with their money, so we have built a robust governance framework around what we do to ensure all investment decisions are taken in the best interest of investors”
Investors are used to government bonds providing diversification benefit by delivering positive returns in market downturns that soften the blows from losses in equities. But, this year, they have suffered the worst losses in a generation due to investors pricing in aggressive central bank rate hikes to tackle inflation. Meanwhile, equities have also made losses due to their sensitivity to interest rates.
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or many years, the 60/40 balanced portfolio, which invests only in equities and bonds, has served investors well as disinflationary forces have resulted in falling bond yields while equities benefitted from long-term economic expansions.
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Hashimoto explains that Royal London favours asset classes that have a long track record of producing returns or reducing risk. “Government bonds have been suffering this year, but despite that, we still see a value in holding them in our multi asset portfolios,” he says.
“That's because during an unexpected deflationary shock – the kind of shock which might be associated with a recession – government bonds provide resilience when everything else - including corporate bonds, equities and commodities - will struggle,” he says.
He stresses, however, that diversification does not mean investing in everything across the board. "We don't invest in cryptocurrencies, for example, because even though one could argue that the blockchain technology is likely to remain in the future; cryptocurrencies are wickedly volatile and very hard to analyse relative to other assets. They have not been tested through a recession, particularly central bank-induced recessions so that's a challenge,” says Hashimoto.
Creating a diversified portfolio comes down to Royal London’s Strategic Asset Allocation process and the entire procedure is conducted within a very robust framework.
“It’s a rigorous process that requires experience and judgement, in-depth consideration of current market conditions, and an appreciation of the costs involved,” explains Scott, “Having an in-house asset manager, combining the wealth of knowledge, facilitates a collaborative approach to this process. This supports our passion for delivering best value to our customers.”
“Customers trust us with their money, so we have built a robust governance framework around what we do to ensure all investment decisions are taken in the best interest of investors,” says Scott.
He explains that there is a disciplined screening process that is involved in selecting appropriate portfolios. This process is based on a range of objectives including the risk/return trade-off, the firm’s own internal philosophy and beliefs, and ESG factors.
A robust framework for every step of the journey
“We always start with customer needs. We believe individual customers have fairly deep-rooted and stable attitudes to risk,” says Scott. “When we are designing portfolios, we're basing that around maximising returns for customers within their risk appetite. We do that by blending distinct asset classes that have different economic drivers and behave in different ways.”
Most savers stay invested for decades and a well-designed portfolio should withstand market shocks and downturns. Royal London applies diversification across all portfolios in the Governed Range, irrespective of investing time horizons or investors’ risk profiles.
Some do, however. Royal London’s Responsible Investment research shows that there are three groups of adviser: a reasonably large segment who expect to see a rise in client demand; a second segment who are hedging their bets; and a third, fairly small segment, who believe demand for responsible investment will be short-lived.
“The direction of travel is towards responsible investment becoming a core and mandated part of financial planning going forward,” says Medlock.
“Some firms will want to include additional questions within their existing and standard fact find”
He also suggests engaging with clients on some of these themes before embarking on a formal fact-finding process, giving advisers a chance to flesh out some of their motivations and interests at an earlier stage.
In advisers’ defence, there are a number of elements that make it difficult to start a conversation on responsible investment. “Perhaps clients have never had a discussion about responsible investment, climate change, social issues, corporate governance or whether they've got preferences for electric cars,” Medlock says. “To bring something new into the conversation can be a challenge in itself.”
More is coming, says Medlock. “We know that the Treasury is working with the FCA in developing a labelling regime, and the FCA has proposed specific labels in their DP21/4 paper. Once that labelling regime is confirmed in the UK, it will significantly help advisers and their clients. It will also help asset managers and asset owners in terms of the labelling and disclosure of their own products.” A new green taxonomy for the UK is in development as well. This is likely to have much in common with the EU’s taxonomy, which was launched earlier this year.
COP26 focused the world’s attention on climate change, and the subject is never likely to be far from the headlines now. That may make it easier to start a conversation with clients. Equally, the pandemic has sharpened the focus on social and governance issues, such as inequality, labour rights and supply chain management.
The headwinds
35%
Want material to support client conversations
34%
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Because the future is uncertain, it is best to spread investments across a range of asset classes which are expected to respond differently to different economic environments. Even in today’s challenging market, a sea change to the last 10 years of disinflationary growth alongside accommodative policy, the diversified nature of the Governed Range has provided greater resilience to inflationary market shocks.
Designing resilient portfolios
“Diversification is key because the future is uncertain”
“When we think about our approach, we are designing to maximise long term returns in excess of UK inflation for a given level of risk. That is the investment objective, so we take inflationary risk seriously when designing our portfolios. It is especially important for UK pensioners but also for all savers in the current environment,” says Hashimoto. “Diversification is key because the future is uncertain, and investors need enough resilience to be confident their portfolio will perform for them in a range of different market conditions.
Inflation resilient asset classes
Low correlation to equities and bonds, directly linked to inflation through exposure to a basket of energy, agriculture and metals, provides a hedge against geopolitical shocks
Income producing real asset as rents tend to rise with inflation
The UK equity market tends to do well in a rising inflation environment due to the relatively high allocations to the resource and financial sectors compared with global peers
Commodities
Real estate
UK equities
“We are also acutely aware of the customers that our portfolios are designed for and their needs” added Ken Scott, Head of Investment Solutions at Royal London. “That means factors like liquidity and cost of ownership come into play in limiting our preference for some more exotic assets”.
Comparison of a typical 60/40 balanced fund with Governed Portfolio 5
There for every step of a saver’s journey
“We're all aging and, over time, our investments need to cater for that. After retirement, rather than just optimising our portfolios for maximum return, we also allow for downside risk. This helps customers with those sequencing risks that they become exposed to when they start to take an income from their pension, “ says Scott, highlighting the key differences the team looks at when designing portfolios for savers along the different steps of their investing journey.
Scott explains that in volatile markets, if an investor has assets that offset each other to give them that diversification resilience, they are in a much better place. This is particularly true for people in retirement who are unable to afford significant market downturns – something our funds are designed to manage.
EQUITIES
North America. 38.7
Europe. 8.8
BONDS & CASH
Japan. 4.7
UK. 2.6
Pac x JP. 4.3
EM. 0.9
UK corporate bonds. 8.0
UK gilts. 32.0
60/40 Balanced Fund strategic mix
UK. 20.6
Commodities. 5.0
EM. 5.9
North America 19.5
Europe. 4.4
Japan. 2.4
Pac x JP. 2.1
PROPERTY
COMMODITIES
Ultra short duration. 7.5
UK index linked gilts. 5.0
UK corporate bonds. 5.0
Property. 12.5
HIGH YIELD
Global high yield. 5.0
UK gilts. 5.0
Governed Portfolio 5 mix
Hiroki Hashimoto, Multi Asset Fund Manager, Royal London Asset Management Hiroki leads the development and maintenance of asset allocation models and capital market research initiatives
Ken Scott, Head of Investment Solutions at Royal London Ken leads the team responsible for the design and management of the Governed Range
Hiroki Hashimoto, Fund Manager
“Investors need broader diversification in their multi asset portfolios and not just equities and bonds to strengthen the resilience of their holdings,” says Hiroki Hashimoto, Fund Manager, Multi Asset at Royal London Asset Management.
Now more than ever, clients need a resilient, evolving, and diversified portfolio
The Governed Range is a multi-asset approach, with baked-in ESG integration that provides clients with portfolio resilience in inflationary and volatile markets, says Ryan Medlock
The technology in society theme offers all sorts of tricky issues that Mike Fox, our Head of Sustainable Investments, and I talk about a lot. At what point are technology companies part of the problem and not part of the solution? How might AI algorithms affect people's ability to get insurance or their human rights? Our approach to this theme is not wholly developed but it is something we are committed to tackling.
We've come up with a climate score which I think is innovative. We've decided to split climate out from environment, for two reasons. First, it recognises that climate affects every company; and second, it recognises that in ESG scores, the climate metrics and variables tend to drown out other important environmental issues like water usage and a company’s impact on biodiversity.
The building blocks of the Governed Range
Investor confidence is boosted with independently led guidance and oversight
Opportunities are targeted across a wide range of asset classes
Value is added with tactical updates to the asset mix and underlying active strategies
The Governed Range is one of the largest multi-asset solutions in the market, with over 1.8 million plans invested in it and over £50 billion assets under management. Responsible investment, which includes ESG integration and demonstrable stewardship, is embedded throughout the entire range.
The range hasn’t stood still since it launched in 2009, and it has continuously evolved to keep pace with changing market best practice and customer needs. This is delivered by leveraging the depth of experience across Royal London and their in-house asset managers, RLAM.
Fully customer-focused and deliberately designed to meet the evolving needs of savers, the Governed Range offers diversification across a wide range of asset classes and robust active management, providing portfolio resilience and flexibility.
“The range is built exclusively with UK savers in mind and offers solutions across broad demographic and risk profiles ranging from the most adventurous to the very cautious”, says Ryan Medlock, Senior Investment Development Manager, at Royal London.
The Governed Range is designed for all UK pension savers, no matter where they are on their retirement journey.
The course of evolution
The public’s awareness of ESG issues continues to gather momentum and attitudes continue to evolve. This is undoubtedly fueled by growing concerns around the climate emergency and the UK’s role in hosting COP26 last year. In addition to environmental issues, social and governance issues have come into sharper focus since the early days of the pandemic, particularly around how businesses are treating both their employees and customers. This has accelerated the demand for investment to be more responsible. “While we think this is very important, what we don’t want to do is create loads of shiny new green solutions for customers,” says Medlock.
"We've chosen to bake responsible investment into the Governed Range so that more customers can benefit from this approach to investing, not just those who make an active decision to move into something with an ESG label,” he says.
Royal London puts stewardship at the cornerstone of its approach to responsible investment. RLAM demonstrates this through voting at AGMs and proactively engaging with the companies it invests in to influence positive change on ESG issues. In addition, Royal London continues to focus on deepening ESG integration across both the full range of asset classes and the underlying strategies used within the Governed Range.
Baked-in ESG integration
more than ever, clients need solutions to guide them through the current unfriendly market environment and beyond.
he recent market shocks can make investors nervous about saving. Combine this with the persistent high inflation which is causing a squeeze on real income and saving for retirement is looking like a daunting commitment. Now
ambition and action to reduce carbon emissions. Yet advisers still report that relatively few clients ask how they can invest more responsibly.
t is clear that people care about climate change. From reducing energy consumption and recycling to protesting outside Parliament, there is no shortage of will,
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What explains this apparent gap? For Sarah Pennells, Consumer Finance Specialist at Royal London, most people do not make the connection between their pension pot and the climate crisis. This matters, because new research from Royal London shows that once people recognise that their long-term savings can make a difference, the proportion of those who say they would prefer their pension to be invested responsibly jumps from 7% to 57%.
There is also increasing evidence that given clear choices, investors are plumping for the responsible option. Morningstar data for Europe shows that in the third quarter of 2021, ESG and sustainability funds drew in 57% of all fund flows.(1) This is a rise from 44% in the second quarter.
There are other elements that are starting to emerge as the market becomes increasingly sophisticated. The drive to measure impact, for example, is becoming a vital part of asset managers’ offering to investors. It is not enough to want to do good; investors require tangible results. As disclosure improves, this is becoming increasingly possible and desirable.
“Advisers are in the perfect position to help clients recognise that where they invest today will help shape the world of tomorrow”
Knowledge and experience are offered by one of the UK’s leading fund managers
Clients can invest their savings responsibly without increasing their costs
Clients get satisfying experience with engaging updates and performance tracking
Impartial governance
Broad diversification
Active management
Expert guidance
Responsible investment
Client-focused
Medlock explains that the Governed Range offers broad diversification across a wide range of asset classes and robust active management, providing portfolio resilience and flexibility.
“Each portfolio is broadly diversified across a wide range of asset classes which means they’re better prepared for inflationary and market shocks. The Multi Asset team within Royal London Asset Management (RLAM) make regular, tactical adjustments to the portfolios to leverage opportunities and provide additional resilience”.
"We've chosen to bake responsible investment into the Governed Range so that more customers can benefit from this approach to investing”
“We take a more active approach to the way we manage the equity funds under our Governed Range. Through the ‘tilts’ we introduced last year, we can marginally reduce our exposure to the largest carbon polluters within our developed market exposure in a risk-controlled framework. This means we’re able to reduce the carbon intensity of the funds in a meaningful way without having a detrimental impact on returns and charges,” says Medlock. Meanwhile, emerging market equity exposure is achieved through tracking an ESG leaders index.
In the commercial property component of the Governed Range, which is an important diversifier, the team has an explicit net zero carbon pathway that includes both direct and indirect managed assets. The cash strategies won’t invest in companies generating more than 10% of revenue from tobacco, armaments, or fossil fuels and ESG research is thoroughly baked into the Credit team’s processes.
“Are we at the full finished article now? Definitely not. This is an area where we are going to continuously evolve, innovate, and strengthen our proposition over time,” says Medlock.
A proactive approach to governance has always been integral to the Governed Range and the Investment Advisory Committee's (IAC) role is to monitor and review each portfolio and ensure it is continuing to meet its objectives. The committee has five members, including an independent chair to ensure impartial governance and independent-led oversight.
Independent oversight
The objective to deliver above inflation growth has allowed both the investment solutions team within Royal London and RLAM to develop and evolve the portfolios over time. The two teams work together on a collaborative basis reviewing strategic asset allocation, executing tactical asset allocation as well as striving to innovate.
Collaboration
“On the asset management side, we utilize different underlying strategies from different teams, so we are benefiting from the active management built into those strategies as well as the benefit of holding different asset classes within a diversified strategy,” says Medlock, “Over the years, this expertise has allowed us to develop a broad canvas in terms of what we can invest in,” he adds.
Medlock explains that collaboration between the two teams has been key to launching new asset classes like the commodities component which is included in the Governed Range, for example. This helps provide additional diversification benefits and a hedge against inflation, key for savers in the current market environment.
Expertise leads one of the UK’s top fund managers
Trevor Greetham, Head of Multi Asset
Headed up by Trevor Greetham, a skilled asset allocation specialist with 27 years of experience
The team consists of 14 investment professionals
The team averages 16 years of experience
27
14
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Royal London is committed to offering great value for money. One element of this is competitive charges, and this is supported by using in-house investment strategies to populate the Governed Range. This means customers can benefit from the range at no additional cost through both the individual and workplace contracts.
Competitive fees
Here you can see the charging structure for individual pension business.
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2010
2014
2016
2018
2020
2022
2012
2015
2017
2019 & 2020
2021
Goverened Portfolio SAA change
New GRIP risk metrics introduced
New asset classes added to GPs
Launch of GPs
Launch of GRIPs
Investment clock process introduced
New asset classes added to GRIPs
Enhanced modelling capabilities and SAA review
New SAA introduced for GPs and GRIPs
Enhanced GP and GRIP functionality to be held as individual funds
Default endpoint changes to drawdown
Introduced tilted equity funds within Governed Range
Emerging Markets (ESG) added to equity allocation
Active global equity diversified component added
Review of active/passive bond allocation
Candia Kingston Independent Chair
JB Beckett Independent Representative
Ewan Smith Director, CEO Office, Royal London Group
Piers Hillier Chief Investment Officer, RLAM
Vidur Bahree Group Investment Director, Royal London Group
Investment Advisory Committee
Candia is a qualified actuary with over 20 years’ experience in the investment industry and is currently a professional trustee of Scottish Pension Trustees Ltd.
JB resides on a number of advisory boards including, the Transparency Task Force and Stirling University Student Investment Managed Fund, and is an independent Non-Executive Director for asset managers.
Ewan Smith CEO Office, Royal London Group
Ewan joined Scottish Life in 1986 and has worked in the Marketing, Investment and Actuarial Research divisions. He also spent 3 years at Scottish Life International (SLI) as Finance Director and Actuary before returning to Scottish Life. Prior to his current role, Ewan was the General Manager of the Marketing Division and Director of Proposition Strategy and Marketing at Royal London.
Piers Hillier Chief Investment Officer, Royal London Asset Management
Piers joined Royal London Asset Management in 2015, having previously worked as Head of International Equities at Kames Capital. Prior to that he’s held Chief Investment Officer roles twice for LV= Asset Management and West LB Asset Management.
Vidur has over 20 years’ experience across insurance and reinsurance M&A, liability-aware investment management and capital management. He was a member of the Phoenix Group management team that led the consolidation of the UK closed life funds sector from 2005. While there, Vidur also established and led the Financial Management Group, developing and implementing investment and asset-liability management strategy. After his time at Phoenix, Vidur was Group Investment Director at Aviva and brought together the group’s insurance investment management leadership worldwide. More recently, Vidur has served as a Senior Advisor to global strategy consultants Boston Consulting Group and consultant to UK retirement insurer Just Group.
The RLAM Multi Asset team is headed up by Trevor Greetham, a skilled asset allocation specialist with 27 years’ experience, along with nine investment professionals, with an average of 20 years’ experience and backgrounds in economic research, asset allocation modelling and multi-asset portfolio construction. They share market commentary with the IAC to inform the design of the Governed Range. RLAM’s dedicated Responsible Investment team work on our customers’ behalf to analyse and understand ESG issues, improve company behaviour, and represent our customers’ views and interests when voting or meeting with companies. The team is headed up by Ashley Hamilton-Claxton, along with ten investment professionals. They share valuable insight with the IAC to make sure ESG factors are included in our investment decisions.
Moody’s Analytics is a world-leading financial risk modelling company. Their economic projection model is updated quarterly to reflect changing market conditions and takes account of current conditions and long-term outlook. They provide a comprehensive risk report to the IAC to inform the design of the Governed Range.
Morningstar Investment Management are recognised as a leading qualitative investment research company in the UK retail funds market. They provide analysis to assess the risk and outlook of external matrix and replacement funds which helps the IAC make informed decisions.
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Ryan Medlock, Senior Investment Development Manager at Royal London Ryan leads the businesses’ engagement strategy with advisers on all things investment-related
Ongoing evolution
* Average charge calculated as a regular premium weighted average AMC across all active policies within new workplace schemes written by Royal London between 1 April 2021 and 31 March 2022.
This active management is combined with ongoing oversight and governance from Royal London’s Investment Advisory Committee to ensure that the portfolios continue to meet their stated objectives.
Within the workplace pension product, charges typically range from 0.35% - 0.6% for the majority of our new schemes, with an average charge of 0.41%.*
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You can find out more on Royal London’s Governed Range here
