Investment Report Standard Life Corporate Investment Proposition Active Plus Funds Report - Q3 2021 - standard Life Workplace
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Investment Report Standard Life Corporate Investment Proposition Active Plus Funds Report Q3 2021
Corporate Investment
Proposition
Our Corporate Investment Proposition is made Choice of Investment Style
up of a family of carefully constructed risk-based
Standard Life Passive Plus Funds –a lower cost
fund of fund portfolios, which offer clients
option investing mainly in tracker funds.
a choice of active and passive investment
strategies across five risk levels. Designed to offer a lower-cost investment
solution, the Passive Plus funds invest in a
They are designed to help clients achieve carefully-selected portfolio that is mainly made
the right balance between risk and reward by up of tracker funds from Vanguard. For more
offering sufficient choice to meet different levels specialist areas, we have included actively
of risk appetite; and providing a risk based managed commercial property and high yield
QWPS default solution. bond funds.
Standard Life Active Plus Funds - an actively-
Generally, higher risk equates to a greater
managed and competitively priced option that
potential return, whilst lower risk equates to
invests in funds managed by abrdn. Designed
a lower potential return. The strategic asset
to offer a competitively priced actively managed
allocation is set using a 10 year view so the
investment solution, the Active Plus funds are
proportion of assets (for example equities or
diversified, multi-asset portfolios investing in
bonds) within each fund is not expected to
a range of funds actively managed by abrdn,
significantly change in the short term
one of Europe’s leading investment managers,
including commercial property and high
The funds are designed to help employers and
yield bond funds. The investment process for
their advisers demonstrate adherence to the
the funds’ strategic asset allocations is the
IGG investment governance principles for DC
same as for the Passive Plus range however
schemes as shown below:
has the additional benefit of Tactical Asset
Allocation, which aims to take advantage of
Clear roles and responsibilities - Solutions
shorter-term investment opportunities. Tactical
provided and governed by Standard Life and
Asset Allocation is carried out by Multi-Asset
abrdn
Solutions.
Effective decision making - Robust strategic abrdn MyFolio Managed Funds – an actively-
asset allocation, tactical asset allocation and managed, higher alpha option that invests
fund selection processes mainly in funds managed by abrdn. Standard
Life MyFolio Managed Funds mainly invest
Appropriate investment options - Range of risk in abrdn funds, with the manager having the
based options and investment styles to suit ability to select alternative investments from the
different risk attitudes rest of the market. The MyFolio Managed Fund
suite includes allocations to diversifying funds
Appropriate default strategy - Risk based which offer a different expected return profile
lifestyle options to traditional asset classes and as such provide
further diversification benefits to the Funds.
Effective performance assessment - 5% of the growth and 20% of defensive assets
Performance reporting with clear investment within each Fund have been replaced with these
objectives with ongoing review and governance diversifying funds. The funds also benefit from
at a fund and solution level Tactical Asset Allocation carried out by Multi-
Asset Solutions.
Clear and relevant communication - Factsheets
(including performance) and customer fund You can find out more about our Corporate
guides Investment Proposition, including our fund
governance processes, at
www.standardlifeworkplace.co.ukContents 1 Environment and Activity 3 Risk 4 Risk and Return Characteristics 6 Performance 8 Standard Life Active Plus I Pension Fund 9 Standard Life Active Plus II Pension Fund 10 Standard Life Active Plus III Pension Fund 11 Standard Life Active Plus IV Pension Fund 12 Standard Life Active Plus V Pension Fund 13 House view
Corporate Investment Proposition
Active Plus Funds Report
Environment and Activity
Environment regions. The sector also saw a return of dividend
policies over the period as the majority of
Global equities rose on aggregate over the third companies that suspended dividend payments in
quarter, with most major world indices rising 2020 have already reinstated or have promised
thanks to solid corporate earnings results and to reinstate cash dividend payments this year.
supportive central bank comments. Despite a
steady rise in Covid-19 Delta infections worrying Activity
investors, US equities posted strong returns, and
Strategic Asset Allocation
most major US indices reached record highs.
However, US equities fell in September, as We review the Strategic Asset Allocation (SAA)
inflation fears and falling bond prices triggered for each of the funds every quarter, with the aim
equity market losses. Similarly, European and UK of ensuring that we continue to meet investors’
equities fell at the end of the quarter, with global long-term investment expectations. At the most
supply chain disruptions, fuel shortages and recent quarterly review, the SAA Committee
slowing growth fears weighing on markets. In confirmed the funds were performing in line with
comparison, Japanese equities had a weak start those expectations on both a risk and return
to the period, as Covid-19 cases hit new highs, basis and no action was required.
but performance improved thereafter. The market
reacted positively to news that Prime Minister
Yoshihide Suga would step down, and news that
the state of emergency, imposed in April, was to
finally be lifted.
It was another challenging quarter for bonds, as
rising inflation fears and hawkish comments from
the US Federal Reserve (Fed) triggered a sell-
off in government bonds that spilled over into
corporate bond markets. UK government bonds
were among the weakest performers. While
corporate bonds performed well until July, they
fell in August amid concerns about a withdrawal
of central bank support following comments from
Fed Chair Jerome Powell. Overall, high-yield debt
generally performed better than investment-
grade bonds. However, European investment-
grade bonds ended the quarter slightly up, as the
European Central Bank continued to maintain a
relatively dovish stance.
UK commercial real estate gained 4.6% over
the three months to the end of August (the
latest data available), according to the MSCI
UK monthly index. Industrials continued to
outperform and drive performance, although
retail picked up over the third quarter as
restrictions eased. Global listed real estate
markets delivered total return in excess of 1.7%
(in sterling terms) for the third quarter. The
market continued to recover over the quarter
with a bias towards reopening sectors (retail,
US residential, hotels), and with business
outlook and confidence improving, mergers and
acquisitions activity also increased across all
1 Corporate Investment Proposition Active Plus Funds ReportCorporate Investment Proposition
Active Plus Funds Report
Environment and Activity
Activity Changes to underlying funds
Tactical Asset Allocation There were no changes to the underlying funds
over the quarter.
Within Tactical Asset Allocation (TAA), we
made no changes over the quarter. We remain
overweight growth assets, through modest
overweight positions in UK, US, European and
emerging market equities, as well as overweight
allocations in global high-yield and emerging
market local-currency bonds. We funded these
overweight positions through underweight
positions in money markets and corporate
bonds (both sterling and global).
Corporate Investment Proposition Active Plus Funds Report 2Corporate Investment Proposition
Active Plus Funds Report
Risk
Unlike traditional managed funds, which aim to The chart below shows the volatility (standard
outperform the peer group, the risk based funds deviation) of each of the five funds within the
do not have a specific performance comparator. Active Plus range since their launch in March
Instead the strategic asset allocations aim to 2012. The volatility of the FTSE* All Share Index
provide the maximum expected return for a has been provided for reference only, this is not
given level of risk over the 10 year time horizon. the comparator for any of the funds.
To ensure the funds continue to perform in
line with customer expectations, we feel it is
important to report on both the risk and return
characteristics of the funds; not just for each
fund in isolation, but as a range.
Active Plus Funds
Fund volatility as at 30 September 2021
FTSE All Share
Active Plus V
Active Plus IV
Active Plus III
Active Plus II
Active Plus I
0 2 4 6 8 10 12 14
%
Source: Financial Express
All figures shown have been annualised using monthly data from March 2012 to September 2021.
Fund volatility figures are calculated using pension fund prices (net of charges) on a bid-bid basis, in pounds sterling (£),
with income reinvested.
*“FTSE®” is a trade mark jointly owned by the London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International
Limited (“FTSE”) under licence. The FTSE All Share Index is calculated solely by FTSE. FTSE does not sponsor, endorse or promote this product
and is not in any way connected to it and does not accept any liability in relation to its issue, operation and trading. All copyright in the index
values and constituent list vests in FTSE. FTSE All Share Index is a trade mark of FTSE.
3 Corporate Investment Proposition Active Plus Funds ReportCorporate Investment Proposition
Active Plus Funds Report
Risk and Return Characteristics
This section illustrates the risk and return allocation to government bonds (teal dot; 50:50
characteristics of the Active Plus range from split between global and UK government bonds)
launch (March 2012) to end September 2021. at the other, and all the possible combinations
in between.
The graph below compares the difference
between the risk and return of the Active It is widely recognised that over the longer
Plus funds to a range of simple portfolios term, investment in equities should achieve
constructed from four assets that would be a better return than a portfolio of bonds but
traditionally used by UK investors; UK equities, this comes with a higher level of risk. In this
global equities, UK government bonds and example we can see that over the period under
global government bonds. These portfolios are review, equities have outperformed bonds but
represented by the blue line on the chart below. with increased volatility and that the various
combinations of the four assets delivered
The blue line displays the historic risk and
different risk/return outcomes.
return characteristics of over 100 sample
portfolios, ranging from a 100% allocation to
equities (split evenly 50:50 between global and
UK equities) at one end (purple dot) to a 100%
Active Plus Funds
Risk vs Return
12
100% Equities
10
Active Plus V
8
% Annualised Return
Active Plus IV
Active Plus III
6 Active Plus II
Active Plus I
4
100% Government Bonds
2
0
0 1 2 3 4 5 6 7 8 9 10 11 12
% Annualised Risk (Standard Deviation)
Source abrdn using data covering the period 1 March 2012 to 30 September 2021.
An implied fee of 0.75% p.a. has been incorporated into the Frontier to allow for a meaningful comparison of performance.
Corporate Investment Proposition Active Plus Funds Report 4Corporate Investment Proposition
Active Plus Funds Report
Risk and Return Characteristics (continued)
What does this mean?
By applying our robust investment process, For a number of years the range of funds
we aim to deliver outperformance on a risk- outperformed the efficient frontier, however
adjusted basis, i.e. the portfolios appearing due to an extreme upwards movement during
to the left and above the theoretical efficient Q2 and Q3 2016, this resulted in a number of
frontier. This frontier is constructed using funds falling below the efficient frontier. Since
a combination of equity/bond allocations that period the funds have not been able to
ranging from 100% equities at one extreme close this gap, however we remain confident in
to 100% bonds at the other. Within both our ability to deliver outperformance on a risk-
the equity and bond allocations the split is adjusted basis over the longer term.
50/50 between UK and non-UK. It is worth
highlighting that we recently changed the
non-UK component of government bonds from
unhedged to hedged, so as to mitigate large
movements in Sterling. While the change deals
with the sterling movement the change also
better reflects the types of bond exposures
uses in our solutions. It is worth highlighting
that our funds include more asset classes
(and regional variations) than simply
equities and bonds and therefore given the
relevant strength of these two asset classes
(specifically global equities) it is not surprising
to see the range of funds sit below the Frontier
for periods of time.
5 Corporate Investment Proposition Active Plus Funds ReportCorporate Investment Proposition
Active Plus Funds Report
Performance
The commentary below represents performance over the quarter with a bias towards reopening
across all the range of Active Plus funds, with sectors (retail, US residential, hotels), and with
positive and negative contributors common across business outlook and confidence improving,
all funds in the risk spectrum (ratings I to V). mergers and acquisitions activity also increased
across all regions. The sector also saw a return of
Global equities rose on aggregate over the third dividend policies over the period as the majority of
quarter, with most major world indices rising companies that suspended dividend payments in
thanks to solid corporate earnings results and 2020 have already reinstated or have promised to
supportive central bank comments. Despite a reinstate cash dividend payments this year.
steady rise in Covid-19 Delta infections worrying
investors, US equities posted strong returns, and Unlike traditional balanced funds that aim to
most major US indices reached record highs. outperform their peer group, the Active Plus
However, US equities fell in September, as funds do not have a specific benchmark. Instead,
inflation fears and falling bond prices triggered their strategic asset allocation aims to provide
equity market losses. Similarly, European and the maximum expected return for a given level
UK equities fell at the end of the quarter, with of risk over a 10-year time horizon. In order to
global supply chain disruptions, fuel shortages allow investors to assess how the funds are
and slowing growth fears weighing on markets. In performing, we have included a comparative
comparison, Japanese equities had a weak start index in the performance sections. We have used
to the period, as Covid-19 cases hit new highs, representative indices based on the strategic
but performance improved thereafter. The market asset allocation of each fund and these are gross
reacted positively to news that Prime Minister of charges.
Yoshihide Suga would step down, and news that
the state of emergency, imposed in April, was to Over the quarter the majority of Active Plus funds
finally be lifted. outperformed their respective benchmarks,
with only Active Plus I underperforming over the
It was another challenging quarter for bonds, as quarter due to the annual management charge.
rising inflation fears and hawkish comments from For multi-asset funds such as the Active Plus
the US Federal Reserve (Fed) triggered a sell-off in range, both asset allocation and stock selection
government bonds that spilled over into corporate decisions affect relative performance (as does
bond markets. UK government bonds were among the annual management charge). During the
the weakest performers. While corporate bonds third quarter, there was a mixed contribution
performed well until July, they fell in August amid from asset allocation across the various Active
concerns about a withdrawal of central bank Plus funds, with some funds registering a small
support following comments from Fed Chair positive contribution (funds II and V) and others
Jerome Powell. Overall, high-yield debt generally a small negative contribution (I, III and IV). Stock
performed better than investment-grade bonds. selection, on the other hand, was positive across
However, European investment-grade bonds all five funds. Over the last 12 months, the
ended the quarter slightly up, as the European majority of the Active Plus funds outperformed
Central Bank continued to maintain a relatively their benchmarks, with Active Plus I the only
dovish stance. underperforming fund over the period as a
result of the annual management charge. On a
UK commercial real estate gained 4.6% over the gross of fees basis, all funds outperformed their
three months to the end of August (the latest data benchmarks, with positive contributions from
available), according to the MSCI UK monthly both stock selection and asset allocation.
index. Industrials continued to outperform and
drive performance, although retail picked up over Over the quarter, exposure to US, Japanese and
the third quarter as restrictions eased. Global European equities, and UK commercial property
listed real estate markets delivered total return contributed to performance. On the other hand,
in excess of 1.7% (in sterling terms) for the UK equities lagged over the period.
third quarter. The market continued to recover
Corporate Investment Proposition Active Plus Funds Report 6Corporate Investment Proposition
Active Plus Funds Report
Performance (continued)
In US equities, Horizon Therapeutics’ share price In UK commercial property, the South-East
gained following good news on several existing industrial and retail warehouse portfolios drove
drug treatments and a growing appreciation of the returns, which produced total returns of 11.2%
company’s progress in developing new drugs. A and 11.0%, respectively. Industrial assets at
large share buyback programme announced by Dagenham were one of the main contributors to
energy technology business Baker Hughes helped returns, in part due to general market movement,
its shares to rally, as well as positive comments with yields continuing to compress amid strong
about future earnings. Lastly, Costco Wholesale’s investor demand. Coupled with this, the portfolio
durable membership model proved successful secured a five-year reversionary lease with Hovis
during a period of increasing market volatility. The at Thames Gateway at a new rent above valuation,
company reaped the reward for its consistent, which improved the rental tone. On a weighted
positive and comparable sales, aided by faster basis, overweight positions in London and
growing sales from new members gained during South-East industrial property had the greatest
the pandemic. impact on performance. The retail warehousing
sector also continued to see a resurgence in
In Japan, Misumi Group, a manufacturer of investor appetite, with further yield compression
precision components used in factory automation, during the quarter. Meanwhile, warehouse
benefited performance. Shares of the company assets delivered strong capital growth which,
rose, as investors foresee sustained growth. The when combined with an attractive income return,
company is capable of supplying its products to produced strong quarterly returns.
customers quickly and improving margins after
strong results. The HR technology platformer However, within UK equities, underperformance
Recruit Holdings also performed well, after was caused primarily by stock selection. The
publishing better-than-expected quarterly results shares of ASOS fell sharply over the quarter, after
and revising its full-year guidance upwards. Strong it warned about the impact of supply-chain issues
demand for hiring in the US was particularly and reduced its full-year earnings guidance. Just
supportive. Elsewhere, industrial gas producer Eat was also weak, following its removal from
Nippon Sanso rose on investor expectations for an the benchmark after the primary listing shifted
earnings recovery. to Amsterdam. The potential for increased
competition due to a partnership between
European equities performed well over the Amazon and Deliveroo weighed on the firm’s
quarter, with sector rotation continuing to be share price.
a key theme. Positions in banks with strong
balance sheets, such as Nordea and BAWAG who
both made a firm commitment to return capital
to shareholders, were key contributors. In the
technology space, the overweight exposure to
lithography equipment manufacturer ASML and
payment provider Adyen benefited performance,
as both came out with strong multi-year growth
expectations. Sector rotation away from
conventional growth stocks meant that the lack
of exposure to underperforming stocks, such as
luxury goods manufacturer Kering, pharmaceutical
company Novartis and brewer AB InBev, was
positive.
7 Corporate Investment Proposition Active Plus Funds ReportCorporate Investment Proposition
Active Plus Funds Report
Standard Life Active Plus I Pension Fund
Performance Comparison as at 30 September 2021
Figures quoted are calculated, net of fees basis over periods to 30 September 2021, with gross income
reinvested. The Comparative Index shown makes no allowance for charges.
10
8
6 5.18 5.30
4.15 3.92 4.12
4 3.49 3.35
2.14 2.33 2.39
2
0.07 0.26
0
-2 -1.16 -1.23
% -4
Q4 2020 Q1 2021 Q2 2021 Q3 2021 1 Year 3 Years 5 Years
p.a. p.a.
Fund Comparative Index
Source: Standard Life for fund information, Financial Express for benchmark data. All returns shown are cumulative performance with gross income reinvested
unless otherwise stated. Fund returns are net of charges (adjusted for scheme specific rebates), and are based on prices to the 1st of the month.
The methodology used for calculating blended benchmarks may differ from that used elsewhere.
This can result in differences in benchmark performance from that shown by underlying managers and/or other data sources.
Asset Allocation
Underweight Strategic Asset Overweight
Asset Class
% Allocation % %
Money Market including Cash -0.25 1.00 -
UK Government Bonds - 3.00 -
Defensive Sterling Corporate Bonds -1.25 21.60 -
Assets Short Dated Sterling Corporate Bonds -0.75 22.30 -
Global Corporate Bonds -0.75 19.30 -
Short Dated Global Corporate Bonds - 6.40 -
UK Equities - 10.20 0.50
US Equities - 2.90 0.50
European Equities - 1.00 0.25
Japanese Equities - 2.50 -
Growth
Asia Pacific Equities - 1.20 -
Assets
Emerging Market Equities - 1.20 0.50
Global High Yield Bonds - 1.00 0.75
Emerging Market Local Currency Bonds - 2.60 0.50
Property - 3.80 -
Portfolios not re-balanced daily. Due to market fluctuations the Fund Composition may vary from the Strategic Asset Allocation.
Corporate Investment Proposition Active Plus Funds Report 8Corporate Investment Proposition
Active Plus Funds Report
Standard Life Active Plus II Pension Fund
Performance Comparison as at 30 September 2021
Figures quoted are calculated, net of fees basis over periods to 30 September 2021, with gross income
reinvested. The Comparative Index shown makes no allowance for charges.
12
10 9.56
8.96
8
5.74 5.39
6
4.57 4.50
3.96 3.57
4 3.04
2.99
2
0.62 0.53
0
% -0.06 -0.13
-2
Q4 2020 Q1 2021 Q2 2021 Q3 2021 1 Year 3 Years 5 Years
p.a. p.a.
Fund Comparative Index
Source: Standard Life for fund information, Financial Express for benchmark data. All returns shown are cumulative performance with gross income reinvested
unless otherwise stated. Fund returns are net of charges (adjusted for scheme specific rebates), and are based on prices to the 1st of the month.
The methodology used for calculating blended benchmarks may differ from that used elsewhere.
This can result in differences in benchmark performance from that shown by underlying managers and/or other data sources.
Asset Allocation
Underweight Strategic Asset Overweight
Asset Class
% Allocation % %
Money Market including Cash -0.25 1.00 -
Sterling Corporate Bonds -0.75 13.00 -
Defensive
Short Dated Sterling Corporate Bonds -0.75 13.10 -
Assets
Global Corporate Bonds -1.25 19.30 -
Short Dated Global Corporate Bonds - 7.00 -
UK Equities - 17.80 0.50
US Equities - 5.10 0.50
European Equities - 2.10 0.25
Japanese Equities - 3.60 -
Growth
Asia Pacific Equities - 2.60 -
Assets
Emerging Market Equities - 2.60 0.50
Global High Yield Bonds - 1.20 0.75
Emerging Market Local Currency Bonds - 4.70 0.50
Property - 6.90 -
Portfolios not re-balanced daily. Due to market fluctuations the Fund Composition may vary from the Strategic Asset Allocation.
9 Corporate Investment Proposition Active Plus Funds ReportCorporate Investment Proposition
Active Plus Funds Report
Standard Life Active Plus III Pension Fund
Performance Comparison as at 30 September 2021
Figures quoted are calculated, net of fees basis over periods to 30 September 2021, with gross income
reinvested. The Comparative Index shown makes no allowance for charges.
16
14 13.39
12.63
12
10
8 7.15
6.69
5.73
6 5.24 4.89
4.73
3.69 3.89
4
2 0.85 0.85 1.17 0.87
% 0
Q4 2020 Q1 2021 Q2 2021 Q3 2021 1 Year 3 Years 5 Years
p.a. p.a.
Fund Comparative Index
Source: Standard Life for fund information, Financial Express for benchmark data. All returns shown are cumulative performance with gross income reinvested
unless otherwise stated. Fund returns are net of charges (adjusted for scheme specific rebates), and are based on prices to the 1st of the month.
The methodology used for calculating blended benchmarks may differ from that used elsewhere.
This can result in differences in benchmark performance from that shown by underlying managers and/or other data sources.
Asset Allocation
Underweight Strategic Asset Overweight
Asset Class
% Allocation % %
Money Market including Cash -0.25 1.00 -
Sterling Corporate Bonds -1.00 8.10 -
Defensive
Short Dated Sterling Corporate Bonds -1.25 8.20 -
Assets
Global Corporate Bonds -0.50 10.40 -
Short Dated Global Corporate Bonds - 4.40 -
UK Equities - 21.30 0.50
US Equities - 9.00 0.50
European Equities - 6.10 0.25
Japanese Equities - 5.20 -
Growth
Asia Pacific Equities - 3.90 -
Assets
Emerging Market Equities - 3.90 0.50
Global High Yield Bonds - 1.70 0.75
Emerging Market Local Currency Bonds - 6.70 0.50
Property - 10.10 -
Portfolios not re-balanced daily. Due to market fluctuations the Fund Composition may vary from the Strategic Asset Allocation.
Corporate Investment Proposition Active Plus Funds Report 10Corporate Investment Proposition
Active Plus Funds Report
Standard Life Active Plus IV Pension Fund
Performance Comparison as at 30 September 2021
Figures quoted are calculated, net of fees basis over periods to 30 September 2021, with gross income
reinvested. The Comparative Index shown makes no allowance for charges.
17.71
18
16.79
16
14
12
10
8.80
8.07
8 6.96
6.02 6.06
6 5.52
4.74
4.42
4
1.97 2.05 1.74
2 1.25
%
0
Q4 2020 Q1 2021 Q2 2021 Q3 2021 1 Year 3 Years 5 Years
p.a. p.a.
Fund Comparative Index
Source: Standard Life for fund information, Financial Express for benchmark data. All returns shown are cumulative performance with gross income reinvested
unless otherwise stated. Fund returns are net of charges (adjusted for scheme specific rebates), and are based on prices to the 1st of the month.
The methodology used for calculating blended benchmarks may differ from that used elsewhere.
This can result in differences in benchmark performance from that shown by underlying managers and/or other data sources.
Asset Allocation
Underweight Strategic Asset Overweight
Asset Class
% Allocation % %
Money Market including Cash - 1.00 -
Sterling Corporate Bonds -0.80 4.00 -
Defensive
Short Dated Sterling Corporate Bonds -0.80 3.90 -
Assets
Global Corporate Bonds -1.40 1.80 -
Short Dated Global Corporate Bonds - 1.50 -
UK Equities - 25.90 0.50
US Equities - 15.00 0.50
European Equities - 8.00 0.25
Japanese Equities - 7.20 -
Growth
Asia Pacific Equities - 5.30 -
Assets
Emerging Market Equities - 5.30 0.50
Global High Yield Bonds - 2.20 0.75
Emerging Market Local Currency Bonds - 6.80 0.50
Property - 12.10 -
Portfolios not re-balanced daily. Due to market fluctuations the Fund Composition may vary from the Strategic Asset Allocation.
11 Corporate Investment Proposition Active Plus Funds ReportCorporate Investment Proposition
Active Plus Funds Report
Standard Life Active Plus V Pension Fund
Performance Comparison as at 30 September 2021
Figures quoted are calculated, net of fees basis over periods to 30 September 2021, with gross income
reinvested. The Comparative Index shown makes no allowance for charges.
24 22.58 22.25
21
18
15
12 10.45
9.95
8.28
9 7.36 7.26
6.70
5.77
6 4.99
3.50 3.63
3 2.13
1.47
% 0
Q4 2020 Q1 2021 Q2 2021 Q3 2021 1 Year 3 Years 5 Years
p.a. p.a.
Fund Comparative Index
Source: Standard Life for fund information, Financial Express for benchmark data. All returns shown are cumulative performance with gross income reinvested
unless otherwise stated. Fund returns are net of charges (adjusted for scheme specific rebates), and are based on prices to the 1st of the month.
The methodology used for calculating blended benchmarks may differ from that used elsewhere.
This can result in differences in benchmark performance from that shown by underlying managers and/or other data sources.
Asset Allocation
Underweight Strategic Asset Overweight
Asset Class
% Allocation % %
Defensive Money Market including Cash -0.25 1.00 -
Assets Short Dated Sterling Corporate Bonds -1.75 2.00 -
UK Equities - 35.00 0.25
US Equities - 22.40 0.25
European Equities - 9.40 0.25
Japanese Equities - 9.80 -
Growth
Asia Pacific Equities - 7.30 -
Assets
Emerging Market Equities - 7.10 0.50
Global High Yield Bonds - 0.00 0.75
Emerging Market Local Currency - 1.00 -
Property - 5.00 -
Portfolios not re-balanced daily. Due to market fluctuations the Fund Composition may vary from the Strategic Asset Allocation.
Corporate Investment Proposition Active Plus Funds Report 12Corporate Investment Proposition
Active Plus Funds Report
House view
Equities Bond Alternatives
Very Heavy
US
Japan
UK Cash
Heavy Corporate bonds
Global EM EM currencies
European ex-UK
Asia Pacific
US$
UK Sterling
Euro
Neutral
Japanese Yen
AUD$
Real estate
Light Government bonds
Very Light
Equities - Heavy investors’ confidence in the Real estate - Neutral
Company fundamentals remain sustainability of growth continues Global REITs have performed
supportive for equity markets, but to be shaken. However, we well recently but we feel this will
with good news already priced in, still expect a strong economic moderate going forward. One
returns over the next 12 months expansion over the next three of the main areas of interest is
are likely to be modest. Bond years, as vaccination rates rise the current outperformance of
yields are expected to rise and this across the globe, particularly in US REITS versus their European
environment usually favours value emerging markets. The Federal counterparts. There may now
shares, with cyclicals expected to Reserve will gradually start to be an opportunity for the latter
outperform defensive companies. reduce asset purchases, with three to close the gap, as European
So, we retain an overweight interest-rate hikes expected in economic prospects improve.
exposure to the more cyclically 2023, with the Bank of England However, the high weighting to
exposed countries, namely the following a similar policy path. German residential real estate
UK and Japan, whose market Valuations also remain expensive remains a risk, due to continuing
constituents derive the majority across all developed market political uncertainty and ageing
of their revenue from overseas. government bonds. housing stock.
However, the UK is expected to
Corporate Bonds – Heavy Cash – Heavy
suffer a significant loss of profit
momentum over the next two Currently, our credit positions are Our cash positions are marginally
years, so we may look for better used primarily to generate income. positive, with a preference for
opportunities elsewhere. We also We therefore favour high-yield retaining underweight exposure to
remain overweight in the US and (HY) bonds and, to a lesser extent, poorly valued government bonds
emerging markets (EMs), as they EM debt. The macroeconomic and investment-grade bonds to
are skewed towards highly cash- environment remains supportive fund risk allocations.
flow-generative larger stocks. of lower-quality credit. As
conditions are in place for Foreign exchange – Neutral $, £, €,
Government Bonds – Light government bond yields to rise, we ¥ and A$, Heavy EM currencies
There have been no changes to remain underweight investment- The emergence of various
our overall underweight allocation grade bonds, while HY bonds fundamental risks means we retain
to government bonds, as prices offer a bigger cushion and are less a lower conviction in expressing
have moved lower recently. Our sensitive to interest-rate moves. currency positions. At the margin, a
macroeconomic outlook for the The portfolio remains modestly slowing in global growth supports
next year suggests government overweight EM hard-currency and the US dollar, although the
bonds prices should fall further, local-currency debt. above-trend rate of growth still
but not materially. Following the benefits sentiment towards cyclical
currencies, which is why we retain
global spread of the Covid-19
some EM exposure.
Delta variant and the continued
disruption of supply chains,
13 Corporate Investment Proposition Active Plus Funds ReportDisclaimers
To create ‘like for like’ comparisons, benchmark returns are based on month end prices, incorporate historic changes,
and may be adjusted by up to two days to align valuation points. Index benchmarks are not subject to charges but sector
comparisons are. Where an official benchmark for a fund is unavailable, a suitable alternative has been used in its place.
Any data contained herein which is attributed to a third party (“Third Party Data”) is the property of (a) third party supplier(s)
(the “Owner”) and is licensed for use by Standard Life**. Third Party Data may not be copied or distributed. Third Party Data
is provided “as is” and is not warranted to be accurate, complete or timely. To the extent permitted by applicable law, none
of the Owner, Standard Life** or any other third party (including any third party involved in providing and/or compiling
Third Party Data) shall have any liability for Third Party Data or for any use made of Third Party Data. Past performance is no
guarantee of future results. Neither the Owner nor any other third party sponsors, endorses or promotes the fund or product
to which Third Party Data relates.
** Standard Life means the relevant member of the Standard Life group, being Standard Life plc together with its
subsidiaries, subsidiary undertakings and associated companies (whether direct or indirect) from time to time.
The methodology used for calculating blended benchmarks may differ from that used elsewhere.
This can result in differences in benchmark performance from that shown by underlying managers and/or other data sources.
Find out more
For more information speak to your usual Standard Life contact.
www.standardlifeworkplace.co.uk
Standard Life Assurance Limited is registered in Scotland (SC286833) at Standard Life House, 30 Lothian Road,
Edinburgh EH1 2DH. Standard Life Assurance Limited is authorised by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority and the Prudential Regulation Authority. www.standardlife.co.uk
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