INVESTING WITH US - Royal London Group · 4 5 Investing with us Working with us We believe our mutuality is a state of mind. Where a PLC may try to push its resources towards generating

This is for financial adviser use only and shouldn’t be relied upon by any other person.

INVESTING WITH US

OUR GOVERNED RANGE

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Welcome

We offer firm foundations of financial security as evidenced by our ‘very strong’1 financial strength rating, and we deliver five-star customer service and boast a range of industry accolades and awards.

Our investment solutions are managed by Royal London Asset Management (RLAM), one of the UK’s leading fund management companies.

With our mutual status, our transparent investment process and commitment to supporting you and your business, we can work together to deliver the best possible outcomes for your clients.

Royal London has over 150 years of experience in helping clients provide for their future. We have

grown through acquisition, investment and sound financial decisions to become the UK’s largest mutual life, pensions and investment company.

1. AKG Actuaries & Consultants Ltd,

January 2018.

Royal London awards

Royal London Asset Management awards

What’s inside

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Working with us

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Our investment philosophy

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Our investment governance

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Our investment solutions

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Capitalising on the market

29 Responsible investment

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Royal London Asset Management’s Multi Asset team

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Working with us

We believe our mutuality is a state of mind. Where a PLC may try to push its resources towards

generating greater profit for its shareholders, our actions will always be guided by the long-term

best interests of your clients. It’s this simple ethos that makes us different to most of our competitors.

Add to the mix Royal London Asset Management’s award-winning investment team,

our robust governance, transparent charging structure and our risk targeted portfolios with strong track records, and there’s a compelling

argument to work with us.

PEACE OF MIND

With monthly rebalancing of the Governed Range portfolios, you and your client have the peace of mind that comes from knowing the portfolio will continue to target the appropriate level of risk.

ONGOING REVIEW

Our client review service provides you with the tools to create personalised reports for your clients, letting them easily understand how their money is invested and how the portfolio is performing over time.

TRANSPARENCY

All of our charges are transparent with no upfront costs, so you’ll never have any surprises.

YOU’RE IN CONTROL

We help to reduce the regulatory and admin burden of managing investments but you retain overall control of your client’s accounts.

PERSONAL SERVICE

You’ll have a dedicated Royal London consultant to ensure you and your clients are getting the support you need.

SAVE YOU TIME

Royal London Asset Management (RLAM) manages the underlying investments, so you can focus on building client relationships and your business.

PORTFOLIO PERFORMANCE

Our range of diversified governed portfolios are designed with the aim of offering your clients consistent and reliable performance.

EXTRA EXPERTISE

RLAM’s award-winning investment and dedicated in-house research teams aim to use their expert knowledge to help you get the best outcomes for your clients.

RESPONSIBLE INVESTMENT

We’re committed to being a responsible investor, which means we ask our asset managers to consider environmental, social and governance (ESG) factors when investing your clients’ savings. We believe this can help manage risk, support informed investment decisions, and help to generate better long-term results.

Our business can help you get the best out of yours.

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Our Governed Range and a Model Portfolio Service

We’re aware that some of you may recommend a Model Portfolio Service (MPS) to your clients, and the table below outlines how our Governed Range compares to an MPS.

BENEFIT

MODEL PORTFOLIO

SERVICE GOVERNED RANGE

Dedicated sales consultant When you work with us you get your own Royal London consultant.

Dynamic asset allocationRoyal London Asset Management’s dedicated multi asset team seeks to exploit market movements.

Governance

Our Investment Advisory Committee provides robust challenges to investment decisions and is headed up by an independent chairperson.

Broad investment universe

Our Governed Range has 4,000+ holdings in each portfolio and offers exposure to a broad range of asset classes including global equities, property, commodities, absolute return and fixed income classes.

A range of investment solutions to suit a range of clients

We offer investment solutions for accumulation, decumulation and target lifestyle strategies based on different risk profiles and term to retirement.

Asset management expertise Award winning Royal London Asset Management expertise.

Our investment philosophy

Our key goal is to deliver the best outcomes for customers. We do this by listening to you,

understanding your clients’ needs, and by adhering to our core beliefs.

STRONG GOVERNANCE

We believe that all investment options should be monitored on a regular basis and that through strong governance we can help to ensure they deliver in line with their objectives.

CUSTOMER - FOCUSED INVESTMENT PROPOSITIONS

We believe the main driver behind designing investment propositions should be delivering positive customer outcomes.

GREATER DIVERSIFICATION

We believe that investing in a wide range of asset classes and strategies will result in more consistent performance across a wide range of economic conditions.

RESPONSIBLE INVESTMENT

We aim to generate good returns whilst also making a positive contribution to our society and environment.

STRATEGIC ASSET ALLOCATION DRIVES PERFORMANCE

We believe that strategic asset allocation (SAA) is the main driver of long-term performance and that SAA’s should perform well in both nominal and real scenarios.

CAPITALISING ON MARKET OPPORTUNITIES

We believe in active management where it can add value relative to a low cost passive approach, and that a tactical asset allocation (TAA) overlay can add value over the long-term.

VALUE FOR MONEY

At the heart of our investment proposition is the aim to deliver value for money to customers. We believe that by managing fees and costs and ensuring efficient implementation we can prevent unnecessary cost, and we aim to be as transparent as possible in our reporting.

We believe in:

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Our investment governance

The IAC consists of pension and investment experts and is headed up by an independent chairperson, to ensure that decisions remain impartial. The IAC meets regularly, usually on a quarterly basis, to review our full investment proposition. The IAC process is deliberately about taking a long-term view to ensure that investment decisions are based on sound fundamentals.

To help the IAC make these decisions they review a substantial amount of material including: fund reports from Morningstar Investment Management Europe Limited, a comprehensive risk report from Moody’s Analytics and market commentary from Royal London Asset Management’s multi asset team.

The IAC currently comprises of five investment experts. The committee currently includes:

Candia KingstonIndependent Chairperson

JB BeckettIndependent Representative

Ewan SmithProposition Strategy & Marketing Director, Royal London Intermediary

Piers HillierChief Investment Officer, Royal London Asset Management

Dr James McCourtChief Risk Officer, Royal London Group

Our governance promise means that all our investment solutions have a formal review process

and are monitored by the Investment Advisory Committee (IAC).

IAC meeting minutes are published on Royal London’s website to ensure full transparency.

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Launched in 2009, our Governed Portfolios are a range of off-the-shelf investment solutions built for customers looking to save into a pension.

With over £33bn in assets under management as at 7 February 2020, our Governed Portfolios are one of the biggest multi asset propositions with a proven track record of strong performance, governance and risk management.

Each quarter we ask Moody’s Analytics to use their stochastic modelling expertise to estimate the annual volatility of each of the portfolios in current market conditions. In the event that a portfolio’s volatility is outside its target range, the Investment Advisory Committee (IAC) would review the strategic asset allocation with the aim of bringing it back within the target range.

Our investment solutions

We’ve developed investment solutions that put the customer first, and are designed to suit wherever

they are on their retirement journey.

Our Governed Range consists of risk targeted portfolios and lifestyle strategies. They

provide the opportunity to participate in UK and global financial markets, within a risk

managed framework.

Governed Portfolios

The objective of each portfolio is to deliver above inflation growth consistent with the target volatility level. There are nine to choose from, and they can support your ongoing suitability requirements and help you meet the needs of your client. All come with regular governance reviews and auto rebalancing at no extra charge.

A robust risk framework

As shown below, each Governed Portfolio targets a forward looking annualised volatility over the different time periods. For example, Governed Portfolio 7 is our highest risk, longest-term portfolio and Governed Portfolio 3 is our lowest risk, shortest-term portfolio - so we would expect Governed Portfolio 7 returns to f luctuate more than returns from Governed Portfolio 3.

RISKTERM TO RETIREMENT

15 years 10 years 5 years

Adventurous Governed Portfolio 7 13.1 - 16.0

Governed Portfolio 8 11.3 - 13.8


Balanced Governed Portfolio 4 11.3 - 13.8



Cautious Governed Portfolio 1 9.5 - 11.6



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1355+15+8+5+5+5+5+2+ADriving long-term performance

Strategic asset allocation

In 2016, as part of our ongoing governance to drive better long-term performance, we completed a strategic asset allocation review of our Governed Portfolios. Following that review there are now 14 different asset classes that are used across the Governed Portfolios, using a mix of active and passive fund management.

The table below shows the strategic asset allocations of each of the Governed Portfolios.

CAUTIOUS BALANCED ADVENTUROUS

GP1 GP2 GP3 GP4 GP5 GP6 GP7 GP8 GP9

Equity 52.50% 42.50% 15.00% 67.50% 55.00% 32.50% 80.00% 70.00% 45.00%

Property 17.50% 12.50% 5.00% 17.50% 15.00% 12.50% 15.00% 15.00% 10.00%

Commodities 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%

HY Bonds 2.50% 2.50% 10.00% 0.00% 2.50% 2.50% 0.00% 0.00% 2.50%

Gilts 5.00% 9.20% 16.70% 1.70% 5.00% 11.70% 0.00% 1.70% 9.20%

IL Gilts 5.00% 9.20% 16.70% 1.70% 5.00% 11.70% 0.00% 1.70% 9.20%

Corporate Bonds 5.00% 9.20% 16.70% 1.70% 5.00% 11.70% 0.00% 1.70% 9.20%

Absolute Return Strategies (incl cash)

7.50% 10.00% 15.00% 5.00% 7.50% 12.50% 0.00% 5.00% 10.00%

EQUITIES

US Equities European Equities Japanese Equities UK Equities Developed Asian Equities Emerging Market Equities

PROPERTY

COMMODITIES

GOVERNMENT BONDS

Conventional UK Gilts Inflation-Linked UK Gilts

CORPORATE BONDS

Investment Grade High Yield

ABSOLUTE RETURN STRATEGIES (INCL CASH)

Governed Portfolios asset classes

3. ςFunds are passively managed and track an index

GOVERNED PORTFOLIO 5

55.0 RLP Global Managed

US Equities, European Equities, Japanese Equities, UK Equities, Developed Asian Equities, Emerging Market Equities

15.0 RLP Property

7.5 RLP Absolute Return Government Bond RLP Deposit RLP Cash Plus

Cash, Absolute return Strategies

5.0 RLP Commodity3

5.0 RLP Medium (10yr) Gilττt

Government Bonds

5.0 RLP Medium (10yr) Index Linked Bond

Inflation-Linked Government Bonds

5.0 RLP Medium (10yr) Corporate Bond

Investment Grade Corporate Bonds

2.5 RLP Global High Yield RLP Short Duration High Yield

High Yield Bonds

To give an example of the asset classes within our Governed Portfolios, the diagram below shows the split of assets in Governed Portfolio 5 and the breakdown of underlying funds managed by Royal London Asset Management.

RLP Global ManagedRoyal London FTSE 350 Tracker Fund3

Royal London US Tracker Fund3

Royal London Japan Tracker Fund3

Royal London Asia Pacific ex Japan Tracker3

Royal London Emerging Markets Tracker3

Royal London Global Equity Diversified FundRoyal London UK Growth FundRoyal London UK Opps FundRoyal London European Growth FundRoyal London European ex UK Tracker 3

Royal London European Opps FundRoyal London UK Equity FundRoyal London UK Mid Cap Growth FundRoyal London UK Smaller Companies FundRLP UK Mid Cap FundRoyal London Short-Term Money Market FundCash

Each portfolio within the Governed Range has more than 4,000 individual holdings.

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Equity exposure within our Governed Portfolios is gained through the RLP Global Managed Fund, which utilises both active and passive investment strategies to provide a comprehensive portfolio of global stocks. With approximately 50% of the fund’s allocation being held in UK listed companies and 50% overseas, the RLP Global Managed Fund provides a well-diversified solution enabling investors to gain exposure to global equity markets.

PROPERTY •

The fund invests in high quality commercial and industrial property. Investment tends to be in traditional areas such as industrial estates, office buildings and high street retail units. However, other properties, such as leisure developments, are actively investigated. The fund makes significant effort to redevelop existing property holdings to improve their appeal and to generate increased rental income.

COMMODITIES •

The fund invests in appropriate derivative instruments linked to commodity markets issued by a range of investment banks and aims to track the Bloomberg Commodity Index.

GLOBAL HIGH YIELD •

The fund will predominantly invest in sub-investment grade debt issued by companies domiciled in the UK, Europe, Asia and the United States, across the high yield credit spectrum. The fund is managed using our disciplined credit investment process focusing on security selection combined with top-down macroeconomic analysis. Our value-orientated approach seeks to exploit the inefficiencies that can be found within high yield credit markets across the globe.

SHORT DURATION GLOBAL HIGH YIELD •

The fund invests a large portion of its assets in short maturity sub-investment grade bonds (those of lower credit quality) issued by companies domiciled in the UK, Europe, Africa, Asia and the Americas. The fund may also invest in short maturity investment grade securities (higher credit quality). It may also invest in short maturity bonds issued by European governments and government related agencies.

MEDIUM GILTS •

The fund invests in medium dated gilts issued by the UK Government. The fund can hold up to 10% in overseas bonds to diversify risk. The fund is managed using a combination of top-down analysis, based on the macroeconomic views of RLAM’s Fixed Interest Team overlaid with bottom-up security selection.

MEDIUM INDEX LINKED •

The fund invests in medium dated, index linked bonds issued by the UK government (also known as index linked gilts). The fund can hold up to 10% in overseas bonds to diversify risk.

MEDIUM CORPORATE BONDS •

The fund invests in medium dated, high quality fixed interest investments from companies around the world. Central to the investment process used across our Fixed Interest Team is the belief that fixed interest markets offer inefficiencies that can be exploited. The fund aims to achieve outperformance from multiple sources (e.g. asset allocation, stock selection, duration and yield curve management as well as off-benchmark investing).

ABSOLUTE RETURN STRATEGIES •

This fund aims to exploit valuation differences amongst the government bond markets of the G10 economies: Belgium, Canada, France, Germany, Italy, Japan, Netherlands, Sweden, Switzerland, UK and the United States. To achieve this, the fund simultaneously takes long positions in ‘cheap’ securities and short positions in related ‘expensive’ securities.

RLP DEPOSIT •

This fund seeks to maximise income by investing in high quality, short dated cash instruments. The managers place particular emphasis on the security of the counterparties they lend to, whilst ensuring daily liquidity. The fund only invests in very straightforward investment instruments, including short dated cash instruments, such as certificates of deposits, time deposits, and call deposits from a range of high quality banks. It may also hold UK Treasury Bills or short dated gilts.

RLP CASH PLUS •

This fund invests in cash, deposits, money market instruments and government bonds with shorter maturities. The fund managers seek to add excess return from adopting measured positions at an outright duration level, along the yield curve and at a stock level.

Risk factors

The following risks are applicable to Governed Portfolio 5.

Exchange rate YES

Emerging markets YES

Concentrated portfolio NO

Smaller companies YES

High yield bonds YES

Sector specific NO

Geared investments NO

Property YES

Higher risk fund NO

Derivatives YES

Equities YES

Bonds YES

Money market YES

Stock lending YES

For more information on risk factors you can read our Guide to Fund Risks - adviser.royallondon.com/fundrisks

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Getting the balance right

Our Governed Portfolios aim to strike the right balance between the risk your client is willing to take and the returns they can expect to receive from long-term investments.

The charts4 opposite illustrate the range of annual returns that we expect across each risk level for Governed Portfolios 4, 5 and 6. These returns are based on current market forecasts and historical investment scenarios.

90% of the time we would expect the annualised returns to be in the range highlighted by the white bars, and the dot within each range represents the projected average annual return over that period.

Remember, past performance is not a guide to the future. Prices can fall as well as rise meaning you may not get back the full amount of capital originally invested. Investment returns may fluctuate and are not guaranteed.

4. Source:Royal London and

Moody’s Analytics, as at December 2019

4.2%

20.3%

-15.5%

4.2%

14.2%

-8.6%

4.5%

12.7%

-5.2%

4.5%

11.5%

-4.3%

4.6%

10.1%

-2.6%

4.9%

9.3%

-1.2%

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5 y

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7 y

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10 y

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15 y

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4.2%

17.8%

-12.5%

4.0%

12.8%

-6.6%

4.2%

11.1%

-4.0%

4.2%

10.0%

-3.0%

4.3%

8.9%

-1.7%

4.6%

8.3%

-0.5%

2.9%

12.3%

-7.9%

2.8%

8.4%

-4.0%

2.9%

7.3%

-2.1%

3.0%

6.6%

-1.5%

3.2%

6.2%

-0.5%

3.5%

6.1%

0.4%

GP6

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GRIPs are our investment solution designed for clients who are looking for f lexible access to their savings for a regular income.

GRIPs are a range of five investment portfolios, designed with the aim of helping clients achieve a sustainable level of income in retirement. With a diversified mix of assets, the GRIPs are designed to be resilient and cope with market shocks whilst also capturing market upside.

As part of our Governed Range the GRIPs benefit from regular reviews and automatic monthly rebalancing at no extra cost.

Income to Age • Real income for 25 years (e.g. 65 to 90)• Nominal income for 25 years (e.g. 65 to 90)

Income for Life • Real income then real annuity purchase at age 75• Nominal income then nominal annuity purchase at age 75

Risk metrics are monitored with a focus on real income as we believe this is more representative of a customer’s true income schedule over an extended time frame as inflation increases the cost of day-to-day living.

The table below shows the most recent income sustainability for each portfolio for someone with savings of £100,000 who is taking income over a 25-year term, such as age 65 to 90, and is paying a total charge of 1% pa. We believe a score of 85% or more indicates a highly sustainable income.

Real Income to 90 (Income Drawdown) - Income Sustainability

GRIP 1 GRIP 2 GRIP 3 GRIP 4 GRIP 5

Actual 93.3% 94.7% 94.7% 93.9% 92.9%

Target Minimum 85% 85% 85% 85% 85%

Real Income to 75 (Annuity Purchase) - Income Sustainability

GRIP 1 GRIP 2 GRIP 3 GRIP 4 GRIP 5

Actual 89.0% 90.1% 90.9% 89.9% 88.4%

Target Minimum 85% 85% 85% 85% 85%

as at November 2019

Governed Retirement Income Portfolios (GRIPs)

5. These assumptions are

representative of a typical income

profile of a Royal London customer

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Driving long-term performance

Strategic asset allocation

Each of the portfolios within the GRIPs is spread across different types of assets to make the portfolios more resilient to unexpected market shocks or inflation spikes.

Benchmark asset allocations6 are shown below. 6. Benchmark asset allocations approved by Investment Advisory Committee December 2017

R I SKLower Higher

10.0% Equity5.0% Property5.0% Commodities2.5% Global High Yield Bonds2.5% UK High Yield Bonds20.0% Corporate Bonds20.0% Gilts20.0% Index Linked Gilts15.0% Absolute Return Strategies (incl cash)





RISKLower Higher

Governed RetirementIncome Portfolio 1










RISKLower Higher






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Equity flexibility

All our portfolios also benefit from additional f lexibility which allows the equity component of the chosen portfolio to be self-selected, using any of the equity funds within our fund range. This can help with diversification of investment style across the portfolios.

There are also alternative passive and active equity management options for your clients to choose from.

TRACKER

The tracker version invests the equity portion of each portfolio in the RLP/BlackRock ACS Global Blend Fund. This is a global equity tracker fund that is automatically blended between UK and overseas equities as part of our governance review process.

ACTIVE

The active version invests the equity portion of each portfolio in a specialist multimanager fund, the RLP Global Blend Core Plus (Rathbone Global Alpha) Fund. This is an actively managed global equity fund of funds that is automatically blended between UK and overseas equities as part of our governance review process. This option is not suitable for use as a scheme default as the fund’s Total Expense Ratio (TER) breaches the charge cap.

Our Target Lifestyle Strategies

Our Target Lifestyle Strategies have been specially created to provide a consistent investment approach for clients who are not receiving a regular review. They are regularly monitored and automatically updated. Depending on the target outcome there are three sets to choose from, each with five risk-graded versions featuring both passive and active equity management styles to choose from.

Our suite of Target Lifestyle Strategies is focussed on three customer retirement choices:

STRATEGYDESIRED CLIENT OUTCOME

Target Cash

Small pension pot likely to be taken as cash

Target Annuity

Preference for a secure income

Target Drawdown

Preference for flexible access to retirement savings

How do they work?

The Target Lifestyle Strategies are designed to reduce investment risk as retirement approaches by gradually switching from higher to lower risk Governed Portfolios. The Target Annuity, Target Drawdown and Target Cash strategies share a similar asset allocation journey until five years before the retirement date. At that point, each strategy takes off on their own unique glidepath with the aim of delivering a f luid and gradual descent to the client’s desired outcome.

RISKYOUR LIFESTYLE JOURNEY

15 years + 10 years 5 years Retirement

Cautious Governed Portfolio 1

Governed Portfolio 2*


Target Cash, Target Annuity,

Target Drawdown

Moderately Cautious

Governed Portfolio 4




Target Drawdown

Balanced Governed Portfolio 4




Target Drawdown

Moderately Adventurous

Governed Portfolio 7




Target Drawdown

Adventurous Governed Portfolio 7




Target Drawdown

*The asset allocation of each Governed Portfolio will depend on what strategy it’s targeting at retirement

The table below shows the Governed Portfolio used at each stage to retirement.

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Monitoring and updating your client’s pension investments can take up valuable time and resource.

Our Flexible Lifestyle Strategy has been designed to enable you to provide a consistent investment approach that is regularly monitored and automatically updated. It means you can make investment decisions based on risk attitude and asset allocation and be confident that a governance process is in place to ensure the strategy continues to meet its objective.

What are the benefits?

FLEXIBILITY

Extra choices mean you can tailor the strategy to your client.

GOVERNANCE AT NO EXTRA COST

Our regular review process takes the hassle out of monitoring client’s strategies.

AUTOMATIC SWITCHING

This is done on a gradual basis once a month saving you time and resource.

AUTOMATIC UPDATES

Any changes to the asset allocation are made automatically so anyone invested in a Flexible Lifestyle Strategy can be confident that their investments are being reviewed to ensure it continues to meet its objective.

REGULAR COMMUNICATION

It’s easy for your client to check their lifestyle strategy. They can view the latest changes online at a time that suits them.

NAME A STRATEGY

You can set up a f lexible lifestyle strategy via our custom range. This allows you to name the strategy and make it easily available to all your clients and demonstrates a tailored approach to your clients. It can also demonstrate greater consistency in your investment approach across similar types of client.

How does it work?

You build a Flexible Lifestyle Strategy using our Governed Portfolios. There are three stages to follow:

Choose three portfolios that match your client’s risk attitude as their time to retirement reduces.

Choose the equity fund or funds from our fund range. You can select different ones for each lifestyle stage.

At retirement choose from one of the following:

• 100% Deposit fund

• 100% Annuity fund

• Stay in the portfolio you have already selected ‘At 5yrs’ in step 1.

• Governed Retirement Income Portfolio (GRIP) 1 - 5

If you need help to decide the best route for your clients’ risk profile, you can complete our online risk questionnaire to give you an idea of their attitude to risk.

The questionnaire is available at adviser.

royallondon.com/riskattitude

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This stresses the importance of selecting a diverse range of assets that can be tactically adjusted in the short-term, with the aim of optimising growth.

In addition to strategic asset allocation, we apply a tactical overlay to the portfolios which is managed by the Multi Asset team at Royal London Asset Management (RLAM).

RLAM seeks to exploit market movements and aim to steer each portfolio towards stronger growth by tactically adjusting the asset allocation of our portfolios. As shown opposite, historical asset class performance has shown wide variations in returns year on year.

The black box represents our Governed Portfolio 5 and here you can see a smoother transition with less volatility in performance.

Capitalising on the market

Tactical asset allocation

YEAR 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

1 Commodities20.5%

IL Gilts19.9%

Global HY18.8%

Global Stocks21.2%

IL Gilts19.0%

UK Property8.6%

Commodities33.3%

Global Stocks14.0%

UK Property4.6%

Global Stocks22.6%

2 Global Stocks17.2%

Gilts15.6%

Corp Bonds13.1%

UK Stocks20.8%

UK Property14.1%

Global Stocks4.4%

Global Stocks30.3%

UK Stocks13.1%

Cash0.6%

UK Stocks19.2%

3 Global HY14.9%

Corp Bonds6.9%

UK Stocks12.3%

Multi - Asset14.3%

Gilts13.9%

Multi - Asset3.2%

IL Gilts24.3%

UK Property8.5%

Gilts0.6%

Mixed Asset13.9%

4 UK Stocks14.5%

UK Property3.0%

Global Stocks12.1%

UK Property7.9%

Global Stocks12.2%

UK Stocks1.0%

UK Stocks16.8%

Multi - Asset8.3%

IL Gilts-0.3%

Global HY12.3%

5 Multi - Asset11.8%

Global HY2.9%

Multi - Asset9.2%

Global HY7.3%

Corp Bonds12.2%

Gilts0.6%

Global HY15.7%

Global HY6.7%

Corp Bonds-1.5%

Corp Bonds9.3%

6 UK Property10.6%

Cash0.6%

Gilts2.7%

Corp Bonds0.9%

Multi - Asset8.4%

Corp Bonds0.5%

Multi - Asset13.9%

Corp Bonds4.3%

Global Stocks-3.1%

Gilts6.9%

7 IL Gilts8.9%

Multi - Asset-0.9%

UK Property1.1%

IL Gilts0.5%

Global HY2.7%

Cash0.5%

Corp Bonds10.6%

IL Gilts2.3%

Global HY-3.6%

IL Gilts6.4%

8 Corp Bonds8.4%

UK Stocks-3.5%

IL Gilts0.6%

Cash0.5%

UK Stocks1.2%

IL Gilts-1.0%

Gilts10.1%

Gilts1.8%

Multi - Asset-4.3%

Commodities3.5%

9 Gilts7.2%

Global Stocks-6.9%

Cash0.6%

Gilts-3.9%

Cash0.5%

Global HY-2.1%

Cash0.4%

Cash0.3%

Commodities-5.7%

Cash0.7%

10 Cash0.5%

Commodities-12.7%

Commodities-5.4%

Commodities-11.2%

Commodities-11.8%

Commodities-20.3%

UK Property-0.9%

Commodities-7.1%

UK Stocks-9.5%

UK Property-1.0%

Source: Royal London, Lipper, as at 31.12.2019. Multi-Asset returns are for the RL Governed Portfolio 5 and are inclusive of 1% Annual Management Charge. Past performance is not a guide to the future. Prices can fall as well as rise meaning you may not get back the full amount of capital originally invested. Investment returns may fluctuate and are not guaranteed.

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FINANCIALS &

CO

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UM

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ISCRETIONARY

MATER

IALS

& EN

ERGY

TECHNOLOGY & INDUSTRIALS

TELECOM, STAPLES, HEALTHCARE & UTILIT

IES

CommoditiesStocks

Bonds CashEnergy

IndustrialMetals

High YieldBonds

GovernmentBonds Linked Bonds

CorporateBonds

PreciousMetals

Softs

REFLATION

OVERHEAT

STAGFLATION

RECOVERY

INFLATION RISES

GR

OW

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OVES

BELO

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END

INFLATION FALLS

8. Source: Royal London Asset

Management, for illustrative purposes

only

Trevor Greetham, Head of Multi Asset at Royal London Asset Management, uses a range of models including the Investment Clock8, momentum and sentiment factors to bring science to investment decision making and influence tactical asset allocation. The Investment Clock relates the global business cycle to the performance of various investments. It incorporates a wide range of indicator data and is used by the team to guide tactical asset allocation across the Governed range.

The Clock’s horizontal axis measures inflation while its vertical axis indicates economic growth. The economic cycle moves through waves - from prosperity to decline, with central banks inflating or deflating monetary policy as a means of stabilising activity within the economy. Clock readings are based on more than four decades of historical data and in addition to asset performance, global economic growth trends and inflation figures, also incorporate other indicators including: earnings, housing, employment, money supply and wage data.

Responsible investment

As the UK’s largest mutual insurance and pension provider, we’re committed to being a responsible investor.

This means we aim to generate good returns whilst also making a positive contribution to our society and environment. Good governance has always been important to us, but going forward, we’ll be more proactive in asking the asset managers we work with to include financially material environmental, social and governance (ESG) risks and opportunities when they make investment decisions.

9. As at 01.12.19. Engagement interactions are substantive letters, meetings, phone calls or emails.

Our way of doing business

We believe it can help to manage risk, support informed investment decisions, and help to generate better long-term results for our customers.

In 2019, Royal London Asset Management’s Responsible Investment team voted 15,665 resolutions, and carried out 2609 engagements - a 55 per cent increase in the number of engagements from 2018 - with 177 companies.

RLAM also became a signatory of the Climate Action 100+, and its European branch, the Institutional Investor Group for Climate Change (IIGCC).

25+13+11+11+9+8+8+3+3+2+2+2+1+1+1+zExecutive Remuneration 109Strategy & Reputational Risks 57Environment Management 49Pensions 49Corporate Governance 38Energy Management 35Health & Safety 34Succession Planning 15AGM Vote 13Climate - Transition Risk 12Water Management 8Other 7Diversity & Inclusion 6Labour Rights and Corporate Culture 4Audit & Accounts 4

2019 Engagement Topics

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Jean Marc LangeSenior Quantitative AnalystJean Marc is a Senior Quantitative Analyst within RLAM’s Multi Asset team.

Hiroki HashimotoFund Manager’Hiroki is a Senior Quantitative Analyst and focusses on tactical asset allocation models, portfolio design and research within the Multi Asset Team.

Melanie BakerSenior EconomistMelanie is RLAM’s Senior Economist with over 19 years’ experience in the financial sector.

Nersen PillayInvestment DirectorNersen is Investment Director in the Multi Asset team, working on tactical asset allocation and the communication of investment strategies.

Stephen ParryImplementation AnalystStephen executes the views of the Multi Asset team and assists with liquidity management.

Jake WintertonAssistant Multi Asset AnalystJake joined the Multi Asset team in 2018 having successfully completed RLAM’s summer internship programme.

Michael ClarksonFund of Funds ManagerMichael is a Fund of Funds Manager within the Multi Asset team and joined RLAM in 2013 following the acquisition of The Co-operative Asset Management (TCAM) by the Royal London Group.

Royal London

RLAM’s experienced team of investment specialists manage over £70 billion of assets,10

investing across all major asset classes.

Trevor GreethamHead of Multi AssetTrevor has 24 years of investment experience. He joined Royal London in 2015 from Fidelity Worldwide Investment where he was Asset Allocation Director and responsible for implementing tactical investment decisions across a wide range of institutional and retail funds.

Simon RubinghSenior Fund ManagerSimon is a Senior Fund Manager within the Multi Asset team and joined RLAM in 2013 following the acquisition of The Co-operative Asset Management (TCAM) by the Royal London Group.

10. As at 30.09.19

Asset Management’s Multi asset team

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Royal London 1 Thistle Street, Edinburgh EH2 1DG

royallondon.com

All literature about products that carry the Royal London brand is available in large print format on request to the Marketing Department at Royal London, 1 Thistle Street, Edinburgh EH2 1DG.

All of our printed products are produced on stock which is from FSC® certified forests.

The Royal London Mutual Insurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. The firm is on the Financial Services Register, registration number 117672. It provides life assurance and

pensions. Registered in England and Wales, company number 99064. Registered office: 55 Gracechurch Street, London, EC3V 0RL. Royal London Marketing Limited is authorised and regulated by the Financial Conduct Authority and introduces Royal London’s customers to other insurance companies.

The firm is on the Financial Services Register, registration number 302391. Registered in England and Wales company number 4414137. Registered office: 55 Gracechurch Street, London, EC3V 0RL.

March 2020 BR5P10009/4

If you’d like to find out more about how Royal London can support your business,

please speak to your consultant or visit adviser.royallondon.com/investment

http://royallondon.com

http://adviser.royallondon.com/investment

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INVESTING WITH US - Royal London Group · 4 5 Investing with us Working with us We believe our mutuality is a state of mind. Where a PLC may try to push its resources towards generating