Balanced Lifestyle Strategy - Annuity - Annual Review

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

BALANCED LIFESTYLE STRATEGY (ANNUITY)

ANNUAL REVIEW

Introduction

This document provides a rolling annual review of the Balanced Lifestyle Strategy (Annuity) and is designed to assist you in preparing your client reports. The information is provided on a sample basis only and you should ensure that your own final version satisfies your compliance requirements. For more information about ourLifestyle Strategies please visit adviser.royallondon.com/investment.

Investment objective

This strategy aims to deliver above inflation growth in the value of the fund and income at retirement, assuming 25% is taken in cash and 75% is used to purchase an annuity. The strategy aims to invest with a level of risk consistent with a balanced risk attitude.

Benchmark allocations

The strategy is invested in the Governed Portfolios shown. You will be automatically invested into the strategy at the point that matches your time to retirement.

As you approach retirement your money is automatically switched to ensure a gradual move between the portfolios and fund splits shown below. The switching occurs on a monthly basis on, or as close as possible to, the date on which your birthday falls.

At 15yrs+ At 10yrs At 5yrsRetirement

Ongoing governance

Your Lifestyle Strategy comes with ongoing governance. This simply means that our investment experts check it regularly. It allows us to maintain the best mix of assets in line with the risk category - and to make sure it is performing in line with its overall objectives - aiming to give you the best returns. The value of your investment can go down as well as up and you may not get back the value of the original investment.

If our experts decide that the mix of assets needs to be adjusted, it happens automatically on your behalf, you don't need to do anything. What's more, this service comes at no extra cost.

Latest tactical allocations at 08/03/2018

At 15yrs+ At 10yrs At 5yrs

Performance at 31/12/17

Past performance is not a guide to the future. Prices can fall as well as rise meaning you may not get back the value of your original investment. Investment returns may fluctuate and are not guaranteed.

Percentage Change
31/12/2016 / 31/12/2015 / 31/12/2014 / 31/12/2013 / 31/12/2012 / Compound Annual
Portfolio Name / 31/12/2017 / 31/12/2016 / 31/12/2015 / 31/12/2014 / 31/12/2013 / Growth Rate (%)
%Chg / %Chg / %Chg / %Chg / %Chg / 3 Years / 5 Years
Governed Portfolio 4 / 9.62 / 15.08 / 3.77 / 8.28 / 17.22 / 9.38 / 10.68
Composite benchmark / 9.34 / 16.89 / 2.35 / 8.26 / 14.77 / 9.36 / 10.20
Difference / 0.28 / -1.81 / 1.42 / 0.02 / 2.45 / 0.02 / 0.48
Governed Portfolio 5 (Annuity) / 8.28 / 14.27 / 3.07 / 9.01 / 14.16 / 8.44 / 9.67
Composite benchmark / 7.99 / 15.71 / 1.82 / 9.10 / 11.81 / 8.35 / 9.18
Difference / 0.29 / -1.44 / 1.25 / -0.09 / 2.35 / 0.09 / 0.49
Governed Portfolio 6 (Annuity) / 5.74 / 11.58 / 2.08 / 8.06 / 8.35 / 6.39 / 7.11
Composite benchmark / 5.37 / 11.91 / 0.91 / 8.65 / 6.48 / 5.96 / 6.60
Difference / 0.37 / -0.33 / 1.17 / -0.59 / 1.87 / 0.43 / 0.51
RLP Annuity / 3.14 / 7.61 / N/A / N/A / N/A / N/A / N/A
Benchmark / 1.33 / 8.02 / N/A / N/A / N/A / N/A / N/A
Difference / 1.81 / -0.41 / N/A / N/A / N/A / N/A / N/A

Tracker lifestyle strategies

Performance of portfolios with the RLP BlackRock Aquila Global Blend fund replacing the RLP Global Managed fund for equity content.

Active lifestyle strategies

Performance of portfolios with the RLP Global Blend Core Plus (Rathbones Global Alpha) fund replacing the RLP Global Managed fund for equity content.

Percentage Change
31/12/2016 / 31/12/2015 / 31/12/2014 / 31/12/2013 / 31/12/2012 / Compound Annual
Portfolio Name / 31/12/2017 / 31/12/2016 / 31/12/2015 / 31/12/2014 / 31/12/2013 / Growth Rate (%)
%Chg / %Chg / %Chg / %Chg / %Chg / 3 Years / 5 Years
Governed Portfolio 4 / 10.70 / 11.02 / 5.76 / 7.67 / 16.90 / 9.12 / 10.34
Governed Portfolio 5 (Annuity) / 9.17 / 10.88 / 4.70 / 8.50 / 13.90 / 8.21 / 9.38
Governed Portfolio 6 (Annuity) / 6.28 / 9.63 / 2.98 / 7.77 / 8.20 / 6.25 / 6.94
RLP Annuity / 3.14 / 7.61 / N/A / N/A / N/A / N/A / N/A

Source: Lipper, bid to bid, as at 31.12.2017, Royal London, as at 31.12.2017. All performance figures, including the figures shown for the growth in the benchmark, have been calculated net of the annual management charge applicable to each fund. Please note that the Governed Portfolios and their benchmarks are rebalanced on a monthly basis.

Performance at 28/02/18

Percentage Change
28/02/2017 / 29/02/2016 / 28/02/2015 / 28/02/2014 / 28/02/2013 / Compound Annual
Portfolio Name / 28/02/2018 / 28/02/2017 / 29/02/2016 / 28/02/2015 / 28/02/2014 / Growth Rate (%)
%Chg / %Chg / %Chg / %Chg / %Chg / 3 Years / 5 Years
Governed Portfolio 4 / 4.96 / 19.61 / -1.80 / 11.29 / 10.90 / 7.22 / 8.75
Composite benchmark / 4.26 / 21.15 / -2.50 / 11.38 / 8.41 / 7.18 / 8.25
Difference / 0.70 / -1.54 / 0.70 / -0.09 / 2.49 / 0.04 / 0.50
Governed Portfolio 5 / 4.06 / 17.69 / -1.53 / 10.70 / 9.48 / 6.43 / 7.88
Composite benchmark / 3.35 / 18.56 / -2.03 / 10.78 / 7.18 / 6.27 / 7.34
Difference / 0.71 / -0.87 / 0.50 / -0.08 / 2.30 / 0.16 / 0.54
Governed Portfolio 6 / 2.35 / 12.30 / -0.40 / 7.23 / 5.90 / 4.60 / 5.38
Composite benchmark / 1.69 / 12.01 / -0.85 / 7.58 / 4.14 / 4.13 / 4.82
Difference / 0.66 / 0.29 / 0.45 / -0.35 / 1.76 / 0.47 / 0.56
RLP Deposit / -0.67 / -0.56 / -0.47 / -0.49 / -0.53 / -0.56 / -0.54
Benchmark / -0.68 / -0.65 / -0.52 / -0.52 / -0.52 / -0.62 / -0.58
Difference / 0.01 / 0.09 / 0.05 / 0.03 / -0.01 / 0.06 / 0.04

Tracker lifestyle strategies

Performance of portfolios with the RLP BlackRock Aquila Global Blend fund replacing the RLP Global Managed fund for equity content.

Active lifestyle strategies

Performance of portfolios with the RLP Global Blend Core Plus (Rathbones Global Alpha) fund replacing the RLP Global Managed fund for equity content.

Source: Lipper, bid to bid, as at 28.02.2018, Royal London, as at 28.02.2018. All performance figures, including the figures shown for the growth in the benchmark, have been calculated net of the annual management charge applicable to each fund. Please note that the Governed Portfolios and their benchmarks are rebalanced on a monthly basis.

Annual Review Log

Date / Details
08/03/2018 / Governed Portfolio 4
Our Investment Clock is in the later cycle ‘Overheat’ stage, with strong global growth and more risk of inflation. We have added to equities again, capitalising on stock market weakness and given that supportive world growth conditions remain in place. The change was funded out of property and high yield debt. With economies continuing to expand and inflation remaining benign, we are overweight global equities, global high yield bonds and commodities.
Governed Portfolio 5 (Annuity)
Our Investment Clock is in the later cycle ‘Overheat’ stage, with strong global growth and more risk of inflation. We have added to equities again, capitalising on stock market weakness and given that supportive world growth conditions remain in place. We also have increased the allocation to 10-year index linked bonds. The changes were funded out of high yield debt and cash. With economies continuing to expand and inflation remaining benign, we are overweight global equities, global high yield bonds and commodities.
Governed Portfolio 6 (Annuity)
Our Investment Clock is in the later cycle ‘Overheat’ stage, with strong global growth and more risk of inflation. We have added to equities again, capitalising on stock market weakness and given that supportive world growth conditions remain in place. We also have increased the allocation to conventional 5-year gilts. The changes were funded out of high yield debt and cash. With economies continuing to expand and inflation remaining benign, we are overweight global equities, global high yield bonds and commodities.
IAC Meeting – 01/03/2018 / Each Governed Lifestyle Strategy continues to be appropriate for its risk profile and investment objective.
08/02/2018 / Governed Portfolio 4
As our Investment Clock moves further into ‘Overheat’ territory, we have added to equities at the margin and also added to commodities again, funded out of bonds. While the supply-demand balance is favourable for commodities, potential for weaker demand in China, the world’s biggest consumer of raw materials, is a concern. The sell-off in equities that began at the end of January seems exaggerated, and we are buying at lower levels, in expectation of a recovery in coming months as the world economy keeps expanding. We will look to maintain an overweight allocation to stocks.
Governed Portfolio 5 (Annuity)
As our Investment Clock moves further into ‘Overheat’ territory, we have added to equities at the margin and also added to commodities again, funded out of bonds. While the supply-demand balance is favourable for commodities, potential for weaker demand in China, the world’s biggest consumer of raw materials, is a concern. The sell-off in equities that began at the end of January seems exaggerated, and we are buying at lower levels, in expectation of a recovery in coming months as the world economy keeps expanding. We will look to maintain an overweight allocation to stocks.
Governed Portfolio 6 (Annuity)
As our Investment Clock moves further into ‘Overheat’ territory, we have added to equities at the margin and also added to commodities again, funded out of bonds. While the supply-demand balance is favourable for commodities, potential for weaker demand in China, the world’s biggest consumer of raw materials, is a concern. The sell-off in equities that began at the end of January seems exaggerated, and we are buying at lower levels, in expectation of a recovery in coming months as the world economy keeps expanding. We will look to maintain an overweight allocation to stocks.
18/01/2018 / Governed Portfolio 4
A combination of our ‘Investment Clock’ moving further into ‘Overheat’ and positive price momentum mean that we have added to commodities at the margin, funded out of bonds. Nevertheless, we remain cautious on commodities as the Chinese economy is likely to slow, and recent US dollar weakness could reverse, in line with interest rate differentials. We slightly increased the position in high yield bonds. We will look to maintain our overweight position in stocks; with investor sentiment so positive, we do not rule out a short-term set-back and we would use such an opportunity to increase our equity allocation.
Governed Portfolio 5 (Annuity)
A combination of our ‘Investment Clock’ moving further into ‘Overheat’ and positive price momentum mean that we have added to commodities at the margin, funded out of bonds. Nevertheless, we remain cautious on commodities as the Chinese economy is likely to slow, and recent US dollar weakness could reverse, in line with interest rate differentials. We slightly increased the position in high yield bonds. We will look to maintain our overweight position in stocks; with investor sentiment so positive, we do not rule out a short-term set-back and we would use such an opportunity to increase our equity allocation.
Governed Portfolio 6 (Annuity)
A combination of our ‘Investment Clock’ moving further into ‘Overheat’ and positive price momentum mean that we have added to commodities at the margin, funded out of bonds. Nevertheless, we remain cautious on commodities as the Chinese economy is likely to slow, and recent US dollar weakness could reverse, in line with interest rate differentials. We slightly increased the position in high yield bonds. We will look to maintain our overweight position in stocks; with investor sentiment so positive, we do not rule out a short-term set-back and we would use such an opportunity to increase our equity allocation.

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. Registered in England and Wales 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 number 4414137. Registered office: 55 Gracechurch Street, London, EC3V 0RL. Royal London Corporate Pension Services Limited is authorised and regulated by the Financial Conduct Authority and provides pension services. The firm is on the Financial Services Register, registration number 460304. Registered in England and Wales number 5817049. Registered office: 55 Gracechurch Street, London, EC3V 0RL.

March 20185RT0130/22