Investment Performance Update - Nov 2015 (SHAPS)

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20.11.15
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 30 June 2015 can be found below:
 

 

Quarter ended

30 June 2015

12 months ended

30 June 2015

5 years ended

30 June 2015

Returns

-3.1%

17.3%

11.1% p.a.

Benchmark

-3.0%

15.5%

10.5% p.a.

Liability Proxy

-4.4%

20.3%

11.1% p.a.


Asset returns were negative during the quarter, especially equity returns. However, asset returns over the past 12 months and five years are ahead of benchmark. 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 lower than actual asset returns, then the Scheme’s funding position will have improved – even where asset returns are negative, as shown in the above quarter’s results).

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

 

Quarter ended

30 June 2015

12 months ended

30 June 2015

Since inception

28 Feb 2013

Returns: TDF 2014-16

-2.4%

7.3%

4.6% p.a.

Returns: TDF 2026-28

-4.6%

8.7%

6.6% p.a.

Returns: TDF 2035-37

-4.3%

8.3%

8.1% p.a.

Returns: TDF 2044-46

-4.3%

8.7%

8.3% p.a.


The returns for the Scheme’s DC funds over 12 months are lower than for the DB funds over the same period; this reflects the different investment strategies that apply in each case.

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