Investment performance update (SHPS DB) - January 2016

News | Updated: 26.01.16 Share this:

At its meeting in December 2015 the SHPS Committee received the latest Investment Report (for the assets that underpin the defined benefit (DB) structures of the Scheme) for the period to 30 September 2015. A summary of the returns can be found below: 


Quarter ended 
30 September 2015


12 months ended
30 September 2015


5 years ended 30 September 2015






8.6% p.a





8.0% p.a.

Liability Proxy*




10.7% p.a.

Equity markets suffered this quarter, with global equities ending the quarter down by 7%.  Equity losses were felt most strongly in the emerging economies led by a more pessimistic outlook in China with knock-on implications elsewhere in the region. 

The Pensions Trust’s policy when structuring a “growth” portfolio is to diversify sources of return to reduce each Scheme’s volatility. This diversification theme paid off this quarter, cushioning the blow from equity falls, although the overall performance of TPT aggregate growth assets was negative, falling by around 4%.

Meanwhile the defensive assets – the Liability Focussed Assets – designed to match liability values, rose in value as government bond yields ended down over the quarter again.  Rising liability values coupled with falling equity markets means that most pension schemes, including SHPS, will have seen funding levels fall during the quarter.

*The ‘liability proxy’ shows how the liability value for an average pension scheme has changed during the periods shown above. This helps to illustrate 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).

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