Adviser > News > June 2010 > Investment Governance Meeting Summary - 7 June 2010
Investment Governance Meeting Summary - 7 June 2010
Our independent Investment Advisory Committee (IAC) meets every three months. The following are the key points from the meeting held on 7 June 2010.
Review of benchmarks and current asset allocations
Benchmarks
In depth
Download the following PDF documents for more information:
No major events were highlighted in the benchmark review but the following points were noted:
-
One year outlook for inflation has increased.
-
Nominal gilt returns (proxy for the risk free rate) fell over short term but increased over medium term while projected real return on index linked bonds decreased.
- Equity volatility continues to settle towards long term average. Overseas equities look more attractive than UK equities due to increased UK inflation expectations.
All the governed portfolios, managed funds and managed strategies are comfortably within their benchmark risk targets therefore no changes are necessary.
Tactical review
Robert Talbut, Chief Investment Officer (CIO) of Royal London Asset Management, maintains his 'neutral' tactical view across asset classes with Governed Portfolios.
| Current tactical position with effect from 9 December 2009 | |
|---|---|
| Equities | Neutral |
| Corporate Bonds | Neutral |
| Index-Linked Bonds | Neutral |
| Property | Neutral |
Tactical Commentary
The first quarter of 2010 was certainly eventful with sharp moves in many asset classes in both directions as markets struggled to digest some very variable news flow. Mid-quarter there was a sudden reappraisal prompted by some monetary tightening in China and rising concern over sovereign debt issues principally in Europe. The monetary tightening was seen as relatively limited and unlikely to scupper the global recovery. In contrast, the property market saw further capital appreciation but at a slower pace than in previous quarters.
Historically the second year of recovery is more problematic than the first. We have witnessed some further tightening of monetary policy outside of the developed markets and more recently some chinks in the run of universally positive economic data. As risk assets have come under pressure so government bonds have found further favour. On a less positive note, latest news from the property market is that activity is slowing again.
Commenting on the pending emergency budget scheduled for 22 June 2010, Robert indicated that he would not anticipate needing to change his current asset allocation stance.
Funds under review
Funds identified for further detailed IAC scrutiny at next meeting
Matrix funds
- Invesco Perpetual UK Growth
- Artemis European Growth
Non-matrix funds
- Close TEAMS funds
- BGI funds
- Allianz RCM Global Equity
- Baillie Gifford
- RLAM FTSE 350 tracker
- Scottish Life Property
- Scottish Life Long (15yr) Corporate Bond
- Scottish Life UK Mid Cap Fund
- Scottish Life Worldwide Fund
The next regular IAC quarterly meeting is to be held on 24 August 2010.
Further information
For more details about how these changes may impact you or your clients, please speak to your usual Scottish Life contact or call us on 0845 60 40 800.
Please note that past performance is not a guide to the future. Prices can fall as well as rise. Investment returns may fluctuate and are not guaranteed.
For professional advisers only
