Connect with us

Top Stories

NEST UPDATES ITS STATEMENT OF INVESTMENT PRINCIPLES

Published

on

NEST UPDATES ITS STATEMENT OF INVESTMENT PRINCIPLES

NEST has updated its statement of investment principles (SIP) based on evidence and its experiences from the last three years. The principles are the framework for NEST’s approach to how it manages its members’ money.

Commenting on the update, Mark Fawcett, NEST’s chief investment officer, says:

‘This exercise is much more than a regulatory requirement for us. Our only objective is to act in members’ interests, to achieve the best outcomes for them over their saving lifetime. That’s what our investment beliefs should help us achieve. We’re not just setting out our tactical approach here, this is about what we believe will deliver the best long term outcomes and is a framework that will guide all our investment decisions.

‘Our investment committee has spent a significant amount of time examining the evidence underpinning these beliefs, including new research into the attitudes and characteristics of our membership. This has convinced us we’re on the right track, but we could be even clearer about how and why we make investment decisions.

Mark Fawcett

Mark Fawcett

‘For our members, putting money aside for retirement’s all about protecting themselves for the future and they need the confidence that their money will be there for them when they retire.

‘For us, this means seeking the best opportunities to deliver on our investment objectives over the longer term, while understanding the need to manage the upsides and downsides of risk. That’s why we’re committed to making decisions based on sound evidence of the underlying value of assets and incorporating factors that are likely to affect this in the long term, such as environmental, social and governance concerns, into the decision making process.

‘And of course, since the chancellor announced greater flexibility in how members can access their pension pots from April next year, we will be developing our investment strategy and consulting on how we can ensure the best outcomes for members in this new landscape. Our investment beliefs will underpin all the decisions we make as a result.’

Changes to the SIP include:

A new belief has been added, highlighting NEST’s strong commitment to basing investment decisions on longer term valuation considerations. This means NEST will actively choose to move away from asset classes it considers over-priced and will seek to invest in relatively under-priced or fairly priced assets instead that are likely to increase in future value. ‘As long term investors, we can take advantage of these opportunities,’ says NEST’s CIO Mark Fawcett.

To reflect this commitment, NEST has developed its existing belief about passive management in recognition of growing evidence that alternative indexing can be a good way to capture these opportunities while still keeping costs low. ‘We’re active in our approach to asset allocation, but where possible we’ll use index funds,’ Fawcett says.

A second new belief reflects NEST’s view that key strategic decisions of asset and risk allocation should be taken by an appropriately resourced and professional in house team. Beyond portfolio construction, in-house functions should include active involvement in the procurement, governance and oversight of fund managers, and the scheme’s responsible ownership approach.
The scheme has also strengthened its belief in the value of incorporating environmental, social and governance risk factors into the investment management process, following new evidence conducted in partnership with FTSE that found statistically significant links between environmental risk factors and long term investment performance.

NEST’s updated investment beliefs are:

  •  Understanding scheme member characteristics, circumstances and attitudes is essential to developing and maintaining an appropriate investment strategy.
  •  As long-term investors, incorporating environmental, social and governance (ESG) factors is integral to the investment management process.
  •  Taking investment risk is usually rewarded in the long term.
  •  Diversification is the key tool for managing risk.
  •  Risk-based asset allocation is the biggest driver of long-term performance.
  •  Economic conditions and long-term market developments inform our strategic decisions.
  •  Indexed management, where available, is generally more efficient than active management.
  •  Integrating valuation considerations into the investment process can enhance our long-term performance.
  •  Good governance, including an appropriately resourced in-house investment function, is in the best interests of our members.

Top Stories

UK’s Sunak to build bridge to recovery with more spending

Published

on

UK's Sunak to build bridge to recovery with more spending 1

By William Schomberg

LONDON (Reuters) – British finance minister Rishi Sunak will next week promise yet more spending to prop up the economy during what he hopes will be the last phase of lockdown, but he will also probably signal tax rises ahead to plug the huge hole in the public finances.

Sunak, who is due to announce a new budget plan on March 3, has already racked up more than 280 billion pounds ($397 billion) in coronavirus spending and tax cuts, pushing Britain’s borrowing to a peacetime record.

Prime Minister Boris Johnson plans to lift England’s current lockdown entirely only in late June so Sunak is expected to rely heavily on the debt markets again.

His job retention scheme, paying 80% of employees’ wages, will probably be extended beyond a scheduled April 30 expiry date, further inflating its estimated cost of 70 billion pounds. Support for the self-employed looks set to stay too.

Businesses are demanding Sunak keep other lifelines, such as exempting the firms hardest hit by the lockdown from property taxes and giving them a value-added tax cut.

And calls are growing for an extension of a 20 pounds-a-week emergency welfare increase due to expire in April.

The Times newspaper said Sunak would prolong his stamp duty property tax break for three months until the end of June.

Sunak hopes that by then Britain will be emerging from its deep freeze thanks to Europe’s fastest vaccination programme.

Bank of England Chief Economist Andy Haldane likens the economy to a “coiled spring” primed with the savings that households have built up after being stuck at home.

A strong recovery would mean a jump in tax revenues, doing some of the Treasury’s job of fixing the public finances.

Rupert Harrison, an aide to former finance minister George Osborne, said Sunak should not try to slash Britain’s 2.1 trillion-pound debt mountain, equivalent to 98% of GDP – a ratio unthinkable for decades.

Instead he should write new budget rules tied to the cost of debt servicing, which is close to record lows.

“We can safely carry higher levels of debt than before,” Harrison told a webinar organised by Onward, a think-tank.

But the scale of Britain’s borrowing is raising questions about how long Sunak and Johnson can stick to their promises not to raise key taxes, made to voters before the 2019 election.

BROKEN PROMISES?

The huge costs of tackling the worst of the coronavirus pandemic are likely to ease in the months ahead, meaning this year’s 400 billion pound budget deficit should narrow.

But Britain is probably on course to be stuck with a gap of 60 billion pounds between revenues and day-to-day spending by the mid-2020s, the Institute for Fiscal Studies think-tank says.

In a nod to that, Sunak is expected to start raising Britain’s low corporation tax rate.

The Sunday Times said the rate would rise steadily to bring in an extra 12 billion pounds a year by the time of the next election, due in 2024.

Other options include ending a freeze on fuel duty increases which has been in place since 2012 and looks at odds with Britain’s plans to be carbon net zero by 2050.

But higher fuel prices now would hurt the haulage industry, already struggling with Brexit-related disruption, and could alienate working-class voters who backed Johnson in 2019.

Higher capital gains tax or lower pension incentives would anger lawmakers in Johnson’s Conservative Party.

David Gauke, a former deputy finance minister, said the only big revenue-raising options were the ones that Johnson has promised not to touch – income tax, VAT and national insurance contributions.

“In the end, they are going to have to say, sorry we just can’t responsibly maintain that manifesto commitment,” Gauke told the Onward webinar.

($1 = 0.7046 pounds)

(Writing by William Schomberg; Editing by Catherine Evans)

 

Continue Reading

Top Stories

Women inch towards equal legal rights despite COVID-19 risks, World Bank says

Published

on

Women inch towards equal legal rights despite COVID-19 risks, World Bank says 2

By Sonia Elks

(Thomson Reuters Foundation) – Women gained legal rights in nearly 30 countries last year despite disruption due to COVID-19, but governments must do more to ease the disproportionate burden shouldered by women during the pandemic, the World Bank said on Tuesday.

Nations should prioritise gender equality in economic recovery efforts, the bank said, warning that progress on equal rights was threatened by heavier job losses in female-dominated sectors, increased childcare and a surge in domestic violence.

“This pandemic has exacerbated existing inequalities that disadvantage girls and women,” David Malpass, World Bank Group president, said in a statement accompanying the annual “Women, Business and the Law” report.

“Women should have the same access to finance and the same rights to inheritance as men and must be at the centre of our efforts toward an inclusive and resilient recovery from the COVID-19 pandemic.”

A total of 27 countries reformed laws or regulations to give women more economic equality with men in 2019-20, said the report, which grades 190 nations on laws and regulations that affect women’s economic opportunities.

While countries in all of the world’s regions made improvements in the new index – with most reforms addressing pay and parenthood, women on average still have only about three quarters of the rights granted to men, the report found.

Notably, nearly 40 countries brought in extra benefit or leave policies to help employees balance their jobs with the extra childcare needs created by coronavirus restrictions.

But such measures were “few and far between” worldwide and will probably not go far enough to tackle the “motherhood penalty” many women face in the workplace, it said.

The report also noted separate data from a United Nations tool tracking gender-sensitive pandemic responses which found 70% of such measures addressed violence, with just 10% targeting women’s economic security.

The pandemic could result in “a backslide on various hard-won advances in women’s rights achieved in recent years”, said Antonia Kirkland, the global lead on legal equality at women’s rights organisation Equality Now.

“This disruption is a unique opportunity for countries to rebuild more resilient, inclusive and prosperous economies,” she told the Thomson Reuters Foundation by email.

“But this can only be achieved alongside the removal of sex discriminatory laws that prevent women from participating fully and equally in economic, social and family life.”

(Reporting by Sonia Elks @soniaelks; Editing by Helen Popper. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

Continue Reading

Top Stories

Digital health checks vital to travel recovery, Heathrow says

Published

on

Digital health checks vital to travel recovery, Heathrow says 3

By Sarah Young

LONDON (Reuters) – Digital health checks will be vital to a recovery in foreign travel from the COVID-19 pandemic, Britain’s Heathrow airport said on Wednesday, after a collapse in passenger numbers saw it plunge to a 2 billion pound ($2.8 billion) loss last year.

The UK government said on Monday trips abroad could restart in mid-May as its vaccination campaign kicks in, sparking a surge in holiday bookings.

It is also looking into a digital health passport or app to help ease restrictions, while conceding the benefits have to be weighed against potential risks to civil liberties.

But Heathrow chief executive John Holland-Kaye said digital technology, and international agreements, would be vital to reviving a travel industry on its knees.

“It’s absolutely critical and that’s one of the main things that government needs to work on,” he said, when asked about a digital health app.

At present, paper checks on COVID-19 test results and passenger locator forms take 20 minutes per traveller at Heathrow, making travel near impossible should passenger numbers rise from current low levels.

Britain’s biggest airport said it was “very likely” people would be able to go on their summer holidays, but expects passenger numbers will take time to recover.

The airport, west of London, is forecasting 25 million passengers in the second half of the year, meaning it would be operating at about 50% capacity.

Heathrow, owned by Spain’s Ferrovial, the Qatar Investment Authority, China Investment Corp and others, last year lost its title as Europe’s busiest airport to Paris after its flight schedules shrank more than those of its rivals.

Passenger numbers plunged 73% to 22 million people last year, with half of those travelling during January and February, before the pandemic shut down global travel in March.

Heathrow said it had 3.9 billion pounds of liquidity, giving it sufficient resources to keep going with low levels of traffic until 2023, despite the 2 billion loss before tax for 2020.

The airport urged the government to provide business tax breaks for big airports, something only available to smaller airports so far, and to extend the furlough job support scheme to help it financially before the recovery takes off.

($1 = 0.7044 pounds)

(Reporting by Sarah Young. Editing by James Davey and Mark Potter)

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate

Latest Articles

Reasons Why You Should Be Opening an Offshore Savings Account Today 4 Reasons Why You Should Be Opening an Offshore Savings Account Today 5
Banking15 mins ago

Reasons Why You Should Be Opening an Offshore Savings Account Today

No one has to convince you that savings accounts are a bad idea. As a safe investment, this approach is...

Vodafone's towers arm plans biggest European IPO of 2021 so far 6 Vodafone's towers arm plans biggest European IPO of 2021 so far 7
Investing2 hours ago

Vodafone’s towers arm plans biggest European IPO of 2021 so far

By Paul Sandle and Arno Schuetze LONDON/FRANKFURT (Reuters) – Vantage Towers, the mobile masts company spun out of Vodafone Group,...

UK's Sunak to build bridge to recovery with more spending 8 UK's Sunak to build bridge to recovery with more spending 9
Top Stories2 hours ago

UK’s Sunak to build bridge to recovery with more spending

By William Schomberg LONDON (Reuters) – British finance minister Rishi Sunak will next week promise yet more spending to prop...

Oil rises despite surprise U.S. stock build weighs 10 Oil rises despite surprise U.S. stock build weighs 11
Investing2 hours ago

Oil rises despite surprise U.S. stock build weighs

By Ahmad Ghaddar LONDON (Reuters) – Oil prices firmed on Wednesday amid continued outages in the United States and a...

Sterling touches $1.42, hits highest vs euro in a year 12 Sterling touches $1.42, hits highest vs euro in a year 13
Trading2 hours ago

Sterling touches $1.42, hits highest vs euro in a year

By Ritvik Carvalho LONDON (Reuters) – Sterling hit $1.42 on Wednesday, coming within touching distance of $1.43, while also reaching...

Strong German data helps European shares recover; Wall Street futures subdued 14 Strong German data helps European shares recover; Wall Street futures subdued 15
Investing3 hours ago

Strong German data helps European shares recover; Wall Street futures subdued

By Elizabeth Howcroft LONDON (Reuters) – European shares rose but U.S. stocks futures pointed to a further tech sell-off in...

EasyJet to raise up to 1.2 billion euros from bond issue 16 EasyJet to raise up to 1.2 billion euros from bond issue 17
Investing6 hours ago

EasyJet to raise up to 1.2 billion euros from bond issue

By Yoruk Bahceli and Abhinav Ramnarayan AMSTERDAM (Reuters) – EasyJet will raise 1-1.2 billion euros from a seven-year bond sale...

ExxonMobil to sell some UK, North Sea assets to HitecVision for over $1 billion 18 ExxonMobil to sell some UK, North Sea assets to HitecVision for over $1 billion 19
Business6 hours ago

ExxonMobil to sell some UK, North Sea assets to HitecVision for over $1 billion

(Reuters) – Exxon Mobil Corp said on Wednesday it would sell its non-operating interest in its UK and North Sea...

JPMorgan's blockchain payments test is literally out of this world 20 JPMorgan's blockchain payments test is literally out of this world 21
Business6 hours ago

JPMorgan’s blockchain payments test is literally out of this world

By Anna Irrera LONDON (Reuters) – Stuck in space with bills to pay? Don’t worry, the satellites could take care...

Aussie, pound soar on reflation bets; dollar struggles 22 Aussie, pound soar on reflation bets; dollar struggles 23
Trading7 hours ago

Aussie, pound soar on reflation bets; dollar struggles

By Saikat Chatterjee LONDON (Reuters) – The dollar struggled at multi-year lows against the Antipodean currencies and held near a...

Newsletters with Secrets & Analysis. Subscribe Now