The Independent Advisers presented the Market Commentary Report for members to consider and note.

Members sought the views of the advisers around the stability of the funding level and how this could be affected by the rise or fall in the Stirling along with the balance of liabilities.

The advisors responded that as a global investor a weaker Stirling can be more beneficial as portfolios not denominated in Stirling will rise. Returns will be eroded with a stronger Stirling. Whilst it is not felt that the funding levels will drop as dramatically as they have just risen, they could and need to be managed by controlling the asset number, which currently has a significant buffer. The current exposure is being monitored with a view to modifying our position, if necessary, for example if the dollar weakened. The liability number is also being carefully monitored, recognising that it is the present value of those liabilities and not the liabilities themselves.

Members also sought clarification on page 62 of the report in relation to ESG, around the claim that some environmental resolutions were overly prescriptive and not sufficiently flexible, and what course of correction can be taken.

The advisors confirmed that there is a lot of debate in this area. A key thought is for businesses to aim for a sustainable business plan that is compatible with minimising environmental damage whilst still achieving their goal – trying to couch environmental objectives in a commercial reality.

Members discussed the change in China’s position in the global market and how this would develop over the next 10 years, along with the concern over being driven by the US markets.

The advisers commented that a lot of China has already moved into a consumer class with an ageing population, and it could be argued that a lot of the growth is now coming out of the US.

Further discussion took place around pharmaceutical investment “bubbles” which reflected on the importance of diverse portfolios.

RESOLVED: Members thanked the advisers and noted the report