Investment implementation document End of March 2017 to end of June 2017

Transcription

1 implementation document End of March 2017 to end of June 2017 All of NEST s funds are delivered by our expert in-house team blending building block funds managed by professional external fund managers. The implementation document (IID) provides information on how this works in practice. Table 1 shows the underlying building block funds used to implement the investment strategy of NEST s fund range. It also shows the total exposure of all NEST funds to each underlying fund as a percentage of all the money managed by NEST. Table 2 shows the selection of building block funds used to deliver each of the NEST funds and the resulting asset allocations. Figure 1 shows the asset allocation for each single year target date fund in the default range of NEST Retirement Date s. This information is updated quarterly. The IID is a companion document to NEST s Quarterly investment report and Statement of investment principles (SIP). You may also find it helpful to read this document in conjunction with Looking after members money. You can find all these documents at nestpensions.org.uk

2 Page 2 implementation document end of March 2017 to end of June 2017 Table 1: Exposure to building block funds and asset classes class manager Date appointed approach Benchmark name Exposure to asset class* Global developed UBS FTSE All World Developed UBS Life World Equity Tracker 35.0% Global developed climate aware UBS 2017 FTSE All World Developed UBS Life Climate Aware World Equity 9.4% UK gilts State Street Global Advisors FTSE Actuaries All Stocks SSgA UK Conventional Gilts All Stocks 0.2% UK index-linked gilts State Street Global Advisors FTSE Actuaries Linked Gilts over 5 years SSgA UK Linked Gilts over 5 Years Equity risk hedging Amundi April 2017 Active N/A NEST Equity Risk 3.2% Low-risk sterling liquidity Amundi April 2017 Active SONIA Amundi Money Market - Short Term GBP 0.4% Low-risk sterling liquidity BlackRock Active Seven-day LIBID BlackRock Aquila Connect Cash 3.0% Ultra short duration investment grade BlackRock December 2016 Active GBP 3 Month LIBID Blackrock Institutional Sterling Ultra Short Bond 2.8% Short Duration Grade Credit December 2016 Active ML 1-5 year Sterling Non-Gilt All Stocks Grade Short Dated Credit 6.3% Global ethical BMO Global ** April Active MSCI World F&C Responsible Global Equity Sharia compliant HSBC Global April Dow Jones Islamic Titans 100 HSBC Amanah Global Equity Sterling corporate April 2012 Active iboxx Sterling Non-Gilt All Maturities UK Corporate Bond Pooled Pension 13.9% UK direct July 2013 Active REF/IPD UK Quarterly Property All Balanced s LGIM Managed Property 0.04% Hybrid (UK direct and global listed ) July 2013 Active FTSE EPRA/NAREIT Global REITS/REF/ IPD UK Quarterly Property All Balanced s LGIM Hybrid Property (70% UK direct, 30% Global listed ) 11.8% Global LGIM March 2016 FTSE EPRA/NAREIT Global Developed Real Estate Global Real Estate Equity 2.4%

3 Page 3 implementation document end of March 2017 to end of June 2017 class manager Date appointed approach Benchmark name Exposure to asset class* Ethical corporate BMO Global ** April 2014 Active iboxx Sterling Non- Gilt All Maturities F&C Responsible Sterling Bond 0.06% Emerging markets (alternative indices) HSBC Global June 2014 HSBC Economic Scale Emerging Markets HSBC GIF Economic Scale Emerging Markets Equity 2.2% Emerging markets (alternative indices) Northern Trust July 2014 MSCI Emerging Markets Custom ESG Northern Trust Emerging Markets Custom ESG Equity 2.2% Emerging market debt Amundi March 2016 Active 50% JPM EMBI Global Diversified Hedged Euro/50% JP Morgan ELMI Plus Amundi s Global Emerging Blended - IE 5.1% Global high yield JP Morgan April 2017 Active Bank of America Merrill Lynch Non- Financial Developed JP Morgan Life High Yield Opportunities 2.0% Markets High Yield Constrained (Hedged to GBP) Short-dated gilts April 2015 Buy and hold N/A LGIM Single Year Gilt s 0.01% *Figures may be affected by rounding. **Please note that F&C funds are distributed by BMO Global

4 Page 4 implementation document end of March 2017 to end of June 2017 Table 2: NEST Retirement Date s allocations to building block funds NEST fund NEST fund class building blocks Target asset allocation* NEST Retirement Date s NEST Starter Foundation Consolidation NEST Post Retirement 1. Global developed 2. Climate aware global developed 3. Gilts 4. -linked gilts 5. Low-risk liquidity 6. Short-dated gilts 7. Sterling corporate 8. UK direct/global listed 9. Emerging market (alternative indices) 10. Emerging market debt 11. Global high yield 12. Equity risk hedging Each NEST Retirement Date follows a glide path with a varying asset allocation each year. The Starter is for members who join NEST before they are eligible for auto enrolment. The Post Retirement fund is for members who join NEST after their State Pension Age or who haven t taken their money out of NEST in the year they were expected to. NEST Retirement Date s that have matured will be closed down and any money remaining in them will be moved over to the NEST Post Retirement. The glide path allocation is managed dynamically and factors in market conditions that contribute to delivering the investment objectives. Please see Figure 1 for a breakdown of the asset allocation of each NEST Retirement Date. NEST Ethical This fund is automatically lifestyled across three s. The asset allocation of each can be found in the last column. Switching from foundation to growth is linear and occurs automatically over five years. Switching from growth to consolidation is linear over 10 years. Foundation Consolidation 1. Global ethical 2. Ethical corporate 3. Short dated gilts 4. UK gilts 5. UK direct 6. Short-dated gilts 7. Equity risk hedging 8. Low risk liquidity 1. Global ethical % 2. Ethical corporate - 40% 3. UK direct % 4. Equity risk hedging % 5. Low risk liquidity % 1. Global ethical % 2. Ethical corporate - 20% 3. UK direct - 15% 4. Equity risk hedging % 5. Low risk liquidity % 1. UK gilts % 2. Ethical corporate % 3. Short Dated Gilts - 25% NEST Sharia 1. Sharia compliant 1. Sharia compliant 100% NEST Higher Risk Members in the Higher Risk are wholly switched into the appropriate Retirement Date when they re 10 years from their expected retirement date. They can change their retirement date at any time. 1. Global developed 2. Climate aware global developed 3. UK direct/global listed 4. Emerging market (alternative and ESG index) 1. Global developed % 2. Climate aware global developed % 3. UK direct/global listed - 18% 4. Emerging market (alternative and ESG index) - 7% 5. Emerging Market Debt - 8% 5. Emerging Market Debt NEST Lower 1. Ultra short duration investment grade 2. Short duration investment grade 1. Ultra short duration investment grade - 50% 2. Short duration investment grade - 50% NEST Pre-retirement fund 1. UK gilts 1. UK gilts % 2. Sterling corporate 2. Sterling corporate % 3. Low-risk liquidity 3. Low-risk liquidity - 25%

5 Page 5 implementation document end of March 2017 to end of June 2017 Figure 1: allocation for each single year NEST Retirement Date 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% NEST Retirement Date s Low-risk sterling liquidity Ultra short duration investment grade Short duration investment grade Gilts Equity risk hedging -linked gilts Hybrid Global listed Global high yield Sterling corporate Emerging market debt Climate aware global developed Global emerging market (economic weighting) Global developed Global emerging market (ESG screened) NEST Corporation All rights reserved. Any form of reproduction of all or any part of this document is not allowed. We do not make any personal recommendation or give advice on how to make decisions concerning investment or taxation. The information in this document does not constitute financial, investment or professional advice or a personal recommendation and should not be relied on. No undertaking is given, or representation or warranty is made, express or implied, by NEST that the material in this document is current, accurate, complete or error free, and the material must not be relied upon as such. NEST does not accept responsibility for any loss caused to any recipient of this document as a result of any error, inaccuracy or incompleteness of the document. The NEST trade marks and trade names used above are owned by NEST Corporation and should not be used in any way without our permission. p50244v /17