Investment Performance Update

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20.08.15

The Committee receives a quarterly report setting out the latest investment performance (in respect of the assets that underpin the defined benefit (DB) structures of the Scheme). A summary of the returns to 31 March 2015 can be found below:

 

Quarter ended

31 March 2015

12 months ended

31 March 2015

5 years ended

31 March 2015

Returns

7.1%

24.0%

10.4% p.a.

Benchmark

6.5%

22.1%

9.7% p.a.

Liability Proxy*

4.6%

27.9%

12.5% p.a.

 

As can be seen from the above table, actual returns have out-performed the benchmark returns. Asset returns continue to be strong, with an equity rally driving growth assets up and defensive assets also tracking upwards as pension liability values continue to rise. The Scheme’s overall investment strategy will be reviewed on completion of the Scheme’s 2015 valuation.

*The ‘liability proxy’ illustrates how the value of reserves required (i.e. liability value) for an average pension scheme has changed during the periods shown above. This helps to understand whether the Scheme’s funding level (i.e. assets divided by liabilities) has got better or worse (e.g. if the liability proxy return is higher than actual asset returns, then the Scheme’s funding position will have deteriorated).

The Target Date Funds (TDFs) relating to the defined contribution (DC) structure of the Scheme have performed as follows:

 

Quarter ended

31 March 2015

12 months ended

31 March 2015

Since inception

28 Feb 2013

Returns: TDF 2014-16

2.7%

11.3%

6.4% p.a.

Returns: TDF 2023-25

5.4%

17.0%

9.4% p.a.

Returns: TDF 2032-34

6.8%

17.0%

10.8% p.a.

Returns: TDF 2041-43

7.5%

17.5%

11.7% p.a.

 

The Committee is scheduled to receive the investment reports to 30 June 2015 at its September 2015 meeting.

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