UK equity income update

Head of Fixed Income, Jonathan Platt and Senior Client Portfolio Manager, Ewan McAlpine will cover recent developments in fixed income markets.

They will address the impact of environmental, social and governance issues, inflationary pressures and discuss the possibility of interest rate rises. Jonathan and Ewan will also review valuations across short duration products and assess their suitability within the current growth and inflationary environment.

Successful vaccine rollouts are driving optimism for the global economy. Head of Multi Asset, Trevor Greetham, will explain why the current environment means the investment clock remains in an overheat position and how this should prove positive for multi asset portfolios with higher weightings in commodities, UK equities and commercial property.

However, Trevor will provide a note of warning and review whether monetary policy may need to tighten should the economic recovery gather pace and inflationary pressures remain.

Executive remuneration has always garnered attention. This has largely been for negative reasons as pay packages have continued to grow and the gap widen between executives and their employees. This was true under normal circumstances; but what happens when the world goes into lockdown, employees are sent home and entire industries fall silent? After the initial emergency steps were taken, what does the new normal look like? Who has responded positively and stuck to their commitments? And who has fallen back into bad habits? Following the recent publication of our Stewardship and responsible investment 2021 report; Sophie Johnson, Corporate Governance Manager and Jeffrey Ndeti, Corporate Governance Analyst will share insights into RLAM’s views and approach when engaging. They will highlight examples from the past year, sharing the positives, negatives and the unknowns of executive remuneration during a period of unprecedented change and uncertainty.

Mike Fox, Head of Sustainable Investments, reflects on the rotation between growth and value stocks over the first half of 2021, and as the sustainable investing environment continues to evolve Mike also provides an outlook for the second half of 2021.

Trevor Greetham, Head of Multi Asset, explains the reasons behind the asset allocation within RLAM’s risk-rated multi assets funds in an environment of rising bond yields and commodity prices which should provide a period of strong growth, as monetary and fiscal policy remain loose. However, Trevor warns that this may tighten should the economic recovery gather pace and inflationary pressures remain.

Will Kenney, Senior Fund Manager, highlights the inflationary pressures created by an earnings recovery across a number of sectors. He examines the reasons behind this and reviews whether the rise in inflation is likely to be transitory or more permanent. Will also reviews the Global Equity team’s Corporate Life Cycle investment process focusing on the ‘accelerator’ and ‘mature’ stages.

Investors are increasingly moving towards a greener and more sustainable approach, driven indirectly through regulations and more directly through meeting heightened stakeholder expectations. In this live and interactive webinar we will analyse what sustainable investing means at RLAM and the specific themes that shape our approach. We will provide insights from a fixed income perspective and an assessment of the key challenges, risks and pitfalls that can come with sustainable investing within credit.

Please join Chris Mills, Institutional Client Solutions Director, alongside Shalin Shah, Senior Fixed Income Fund Manager, and Matt Franklin, Senior Credit Researcher as they share our views on how best to construct a sustainable credit investment portfolio.

Head of Responsible Investment, Ashley Hamilton-Claxton and Responsible Investment Operations Manager, Beth Goldsmith, will provide an overview of the activity undertaken by the team over the past year including the stewardship of RLAM’s investments and the integration of ESG into investment processes. They will also provide an assessment of current themes in the market, such as SFDR and TCFD and conclude with an outlook on how the landscape for responsible investing may evolve.

The race to zero emissions is gaining momentum and decarbonisation commitments from corporates and governments are increasing ahead of the next UNFCCC COP26*. The apparent gap between the science-based emissions’ reductions required to halt climate change and the trajectory of the economy seems to be closing, as shown in the recently published International Energy Agency (IEA) Net Zero 2050 scenario modelling. But what is the size of the gap? How trustworthy are these Net Zero commitments? And, what is RLAM’s role in achieving Net Zero and helping our clients to fulfil their own climate commitments? Following the recent publication of our Stewardship & responsible investment 2021 and 2020 TCFD reports, Carlota Garcia-Manas, Head of Engagement and Simonetta Spavieri, Responsible Investment Analyst will share insights on RLAM’s climate strategy: they will unravel the climate regulatory maze, highlight the shortfalls and improvements in climate metrics and provide examples of how all this influences RLAM’s ambition to be a catalyst for a Paris-aligned economy.

*United Nations Framework Convention on Climate Change, 26th Conference of the Parties.

Trevor Greetham, Head of Multi Asset, explains why the Investment Clock remains in an ‘overheat’ position and argues that monetary policy may tighten should the economic recovery gather pace and inflationary pressures remain.

Will Kenney, Senior Fund Manager, examines the current economic environment, where inflation remains in focus. He reviews the Global Equity team’s corporate life cycle investment process and focuses on examples of ‘accelerator’ and ‘turnaround’ holdings.

As yields have reached an all-time low, Head of Alpha Strategies, Paul Rayner will outline his thoughts on whether government bond markets should still be viewed as a ‘risk off’ asset allocation. With record levels of financial stimulus from central banks, Paul will consider the inflationary effect and whether the risks associated with governments bonds should be re-considered. He will also provide a view on what the future may look like for this perceived ‘safe haven’.

Head of Multi Asset, Trevor Greetham and Senior Economist, Melanie Baker consider how inflationary pressures are very much in evidence as developed economies re-open. However, they believe fiscal and monetary policy is extremely loose and policy makers appear to be in no hurry to tighten.

Trevor and Melanie will debate:
• What are the risks that a short term burst of inflation will become more entrenched?
• Which sectors and asset classes are most likely to protect purchasing power?
• Does this period finally spell the end for the bull market in bonds?
• Should investors be looking to diversify more broadly, to protect wealth and to capitalise on emerging trends?

Insurers are increasingly moving towards a greener and more sustainable investment approach, driven indirectly through insurance regulations and more directly through meeting stakeholder’s heightened expectations. However, a sustainable investment approach can vary significantly between investors, and there are many potential pitfalls to be aware of that can mean the returns achieved are compromised and / or the societal and environmental benefits are not fully realised.

Please join our team of Mike Fox (Head of Sustainable Investments), Shalin Shah (Senior Fixed Income Manager) and Andrew Epsom (Insurance Client Solutions Director) as they share our views on how best to construct a sustainable investment portfolio. Mike will provide an overview of what sustainable investing means at RLAM, and how we invest on a sustainable basis touching upon equity specific themes. Shalin will then provide insights from a fixed income perspective and highlight some of the key challenges, risks and pitfalls that can come with sustainable investing within credit.

Head of Rates and Cash, Craig Inches will provide a summary of cash rates, credit spreads and a view on the direction that base rates may head towards. Craig will argue that although negative interest rates no longer seem imminent, yields remain low and RLAM provide a range of cash solutions which aim to meet different client objectives. He will provide an update on how ESG is being integrated into the security selection process before finishing with a market outlook for the remainder of 2021.

Stewardship and Responsible Investing Report 2021 from Royal London Asset Management

Government bond yields rose significantly over the first quarter of 2021. Head of Sterling Credit, Paola Binns will provide an insight into the reasons why before a more specific update on how the market has impacted key funds. Paola will provide an overview on positioning and liquidity within the respective funds, which differentiates them from peers in the market, before concluding with a market outlook for the remainder of the year.

Will Kenney, Senior Fund Manager, reviews the current environment and whether inflationary pressures may be transitory or become more established. Will evaluates the impact this may have on the Global Equity team’s bottom up, stock specific, corporate lifecycle investment process.

As the global economy reopens, Head of Multi Asset, Trevor Greetham, explains why he thinks we may see more rotation than appreciation in stock markets as highly valued technology shares struggle in the face of rising bond yields. A more inflationary post-Covid recovery should benefit multi asset portfolios with higher weightings in commodities, UK equities and commercial property in his view.