Our investment strategy

When it comes to an investment strategy for your workplace pension scheme, we keep it simple. We have one robust, carefully-thought-out, investment strategy which aims to give positive outcomes over the long term.

This enables you to offer your employees an investment solution that is well designed, good value and managed by experienced professionals.

Our investment funds

We use two investment funds to achieve our objectives.

Diversified Growth Fund (DGF)

This fund is designed to provide stable growth over the long term. To achieve this it spreads money across four investment areas that tend to perform differently in different economic conditions – an approach known as diversification.

The DGF allocates the investments between the four areas, each of which has different risk and return characteristics. Our investment manager decides on the balance across the different areas and is based on its long-term risk/return assessment of different asset classes, expected levels of diversification and impact of changing economic conditions. The four areas are:

  • equities (shares)
  • interest rates
  • inflation
  • other investments.

Retirement Countdown Fund (RCF)

An employee’s pension savings start to be switched into this fund ten years before they plan to retire. It aims to protect the value of the money built up, reducing the risk of falls in value before it is used for retirement benefits. To achieve this it uses cash and investments that behave in a similar way to cash.

We call this timed switch from one fund to another the retirement glidepath.

Investment management

Our independent board of trustees is responsible for deciding how to invest members’ pension savings.

They take advice from professional investment advisers and they delegate day-to-day management decisions to investment managers.

The trustee board regularly reviews the investment objectives and decides how best to achieve them.

The trustee board has appointed Redington as our investment advisers and Cardano Risk Management Limited (CRML) as our investment manager.

 

Men in a circle in the woods

Protection and safeguarding

We employ a custodian to protect the Scheme funds by holding them in a ring-fenced account, separate from both NOW: Pensions and the custodian’s own money.

Our custodian is BNY Mellon, one of the world’s largest custodians. It looks after over US$30 trillion on behalf of pension schemes and other investors.

It has strong credit ratings: for example, the credit rating agency Standard and Poor’s rates it AA (low) for long-term deposits.