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Should there be a material change in the Scheme ’s circumstances, the Trustee will review whether, and to what extent, the investment arrangements should be altered; in particular whether the current risk profile remains appropriate.
4.
Investment Strategy
The Trustee has agreed with the Company to an investment strategy of 60% growth assets (equities and target return funds) and 40% protection assets (traditional UK gilts, index-linked gilts, liability driven investment (LDI), corporate bonds and cash). Both the growth and protection ranges may fluctuate by up to +/-10% to allow for movements in the markets. The Trustee believes that this mix of assets is currently appropriate for controlling the risks identified in Section 3 and meeting the investment objectives set out in Section 2.
The investment strategy is subject to review at least every three years or in the event of significant changes to the characteristics of the Scheme’s liabilities.
Rebalancing Policy
The actual asset mix is monitored by the Trustee on a regular basis to analyse any variations from the strategic allocation. If an asset class exceeds the rebalancing trigger at the end of a quarter, the asset allocation is normally rebalanced, but having regard for the current investment and economic climate. Rebalancing must return the asset allocation to within the range of the strategic allocation of 60% growth +/- 5% and 40% protection +/- 5%. Any switch out or into an asset class must pay due regard to the impact on the other asset classes and the cashflow requirements of the Scheme.
5.
Day-to-Day Management of the Assets
Day to day management of the Scheme’s assets is undertaken by a number of investment managers. The Trustee has taken steps to satisfy itself that the managers have the appropriate knowledge and experience for managing the Scheme ’s investments , and that they are carrying out their work competently.
The Trustee has determined, based on expert advice, appropriate benchmarks, objectives and/or investment guidelines for each manager.
The Trustee regularly reviews the continuing suitability of the Scheme ’s investments, in cluding the appointed managers and the balance between active and passive management, which may be adjusted from time to time.
Details of the appointed managers can be found in the IIP, which is available to members upon request.
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