GOVERNED PORTFOLIOS · Asset allocation designed to deliver above inflation growth whilst taking...

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GOVERNED PORTFOLIOS

Our multi asset investment solution

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With an ever growing number of funds and asset classes on offer, it’s becoming increasingly difficult to choose a suitable portfolio of funds for your clients, in a cost effective way.

That’s why we’ve developed an investment solution that puts the customer first and offers a consistent investment approach with a robust governance process.

Our Governed Portfolios are a range of off-the-shelf investment solutions built for customers looking to save into a pension.

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What’s inside

06 Investing for your clients

07 Introducing Governed Portfolios

08 A closer look at Governed Portfolios

10 The benefits of Governed Portfolios

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Investing for your clients

There are lots of things to think about when deciding how to invest your clients’ pension savings. Such as deciding what the right asset mix should be for an investor depending on their attitude to risk, and whether the asset mix should change depending on how close they are to retirement. Getting this balance right can make a huge difference to how their investments perform.

Our view is that performance generally stems from asset allocation rather than just picking a star performing fund.

However, it’s not just about getting the asset allocation right at the start. As different asset classes produce different returns, the percentage invested in each category changes over time. So it’s important to review it regularly to make sure it still matches your client’s risk attitude.

Choosing a suitable investment solution for your clients and regularly monitoring and updating your client’s pension investments can take up valuable time and resource.

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Introducing Governed Portfolios

This will enable you to make investment decisions based on risk attitude and asset allocation and be confident that a robust governance process is in place to ensure the chosen portfolio continues to meet its objective.

There are nine portfolios to choose from, each one made up of a diversified mix of asset classes and designed for a particular risk attitude and time to retirement.

So depending on how long clients have until they retire, some portfolios are suitable for

more than one risk attitude. The portfolios can be invested in individually or used as part of a lifestyle strategy.

Our Governed Portfolios benefit from our commitment to being a responsible investor, which means we ask our asset managers to consider environmental, social and governance (ESG) factors when investing your clients’ savings. We believe this can help manage risk, support informed investment decisions, and help to generate better long-term results.

If you wish to invest in a Governed Portfolio you can check which one is suitable for your client’s requirements. The diagram on the following page shows the strategic asset allocations of each of the Governed Portfolios ranging from lower risk to higher risk.

If you wish to invest in a lifestyle strategy please see the leaflet Governed Range - Target Lifestyle Strategies.

Our Governed Portfolios have been designed to provide a consistent investment approach that is regularly monitored by our Investment Advisory Committee (IAC) and automatically updated at no extra cost. The minutes from each IAC meeting are published on our website.

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Time to Retirement

Long (15 yrs) Medium (10yrs) Short (5yrs)

A closer look at Governed Portfolios

Each portfolio is made up of a diversified mix of asset classes. The strategic asset allocations of each Governed Portfolio is shown in the diagram.

67+17+5+5+2+2+2+0+A80+15+5+AGP 4

GP 7

Equities 67.50%Property 17.50%Absolute return strategies (inc. cash)

5.00%

Commodities 5.00%Index-linked government bonds 1.70%

Corporate bonds 1.70%Government bonds 1.70%High yield bonds 0.00%


0.00%



50+20+12+4+4+4+4+2+AGP 1 Equities 52.50%

Property 17.50%Absolute return strategies (inc. cash)

7.50%



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Time to Retirement

Long (15 yrs) Medium (10yrs) Short (5yrs)

32+13+13+4+12+12+12+2+A45+11+11+4+9+9+9+2+A

GP 6

GP 9

58+18+6+4+4+4+4+2+A70+15+4+4+2+2+2+1+A

GP 5

GP 8


12.50%




7.50%




10.00%




5.00%



15+4+15+4+18+18+16+10+AGP 3

43+14+10+4+9+9+9+2+AGP 2 Equities 42.50%

Property 12.50%Absolute return strategies (inc. cash)

10.00%




15.00%



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The benefits of Governed Portfolios

1. GOVERNANCE AT NO EXTRA COST

A regular review process which takes the hassle out of monitoring asset allocation and ensures the Governed Portfolios continue to meet

their objectives.

7. PERFORMANCEGoverned Portfolios have a proven track

record for delivering on risk, returns and

governance.

8. EASILY ACCESSIBLE

It’s easy for your clients to see the portfolio they’re invested in.

They can view the latest changes online at a time

that suits them.

9. STRONG TRACK RECORD

Delivering a successful investment solution for your clients to save for

retirement.

10. FLEXIBILITYGoverned Portfolios

offer the option to change the default

equity option to any of our other equity funds.

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2. DYNAMIC ASSET ALLOCATION

Each Governed Portfolio has a strategic asset allocation that is

time and risk appropriate. Tactical asset allocation adjustments are made to take advantage of short

term market movements.

3. AUTOMATIC UPDATESAny changes to the asset mix are

made automatically so anyone invested in a Governed Portfolio

can be confident that their investments are being reviewed

to ensure that the portfolio continues to meet its objective.

4. AUTOMATIC REBALANCINGGoverned Portfolios come with

monthly rebalancing as standard. It means that your client’s investment

split is realigned to the portfolio that originally matched their attitude to risk. If a portfolio is not rebalanced regularly, the asset split can drift

significantly over time changing the portfolio’s risk profile.

5. DIVERSE RANGE OF ASSETS

Asset allocation designed to deliver above inflation growth

whilst taking account of the relevant risk attitude. Risk is managed by spreading the investments across various

asset classes.

6. RESILIENTA diversified mix of assets has helped the Governed

Portfolios stand resilient over 11 years of uncertain times

including the fallout from the Global financial crash, China/

US tension and Brexit.

If you’d like to find out more about how Royal London can support your business,

please speak to your consultant or visit adviser.royallondon.com/investment

Royal London 1 Thistle Street, Edinburgh EH2 1DG

royallondon.com

We’re happy to provide your documents in a different format, such as Braille, large print or audio, just ask us when you get in touch. All of our printed products are produced on stock which is from FSC® certified forests.

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, company number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL. Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority and introduces Royal London’s customers to other insurance companies.

The firm is on the Financial Services Register, registration number 302391. Registered in England and Wales company number 4414137. Registered office: 55 Gracechurch Street, London, EC3V 0RL. RL Corporate Pension Services Limited, registered in England and Wales, Company number

05817049. Registered office is at 55 Gracechurch Street, London EC3V 0RL

March 2020 BR5P10011/4

http://adviser.royallondon.com/investment

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