NEST has updated its statement of investment principles (SIP) based on evidence and its experiences from the last three years. The principles are the framework for NEST’s approach to how it manages its members’ money.
NEST feels that investment decisions should take long-term valuations into account, which it said means that it will move away from overpriced assets and into assets at lower valuations. NEST also has a belief that indexation, which could include approaches such as smart beta, is generally more efficient than active management. Another belief is that in-house investment resources can add to good governance.
NEST CIO Mark Fawcett commented: “This exercise is much more than a regulatory requirement for us. Our only objective is to act in members’ interests, to achieve the best outcomes for them over their saving lifetime. That’s what our investment beliefs should help us achieve. We’re not just setting out our tactical approach here, this is about what we believe will deliver the best long-term outcomes and is a framework that will guide all our investment decisions.”