Tracker Plan investor update Q2 2020

Olivia Kennedy

by , Senior Defined Contribution Investment Strategist at State Street Global Advisors

13 Aug 2020 /  

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Hi, I’m Olivia Kennedy from State Street Global Advisors, and I’m here to give you an update about the Tracker Plan, which you are invested in.

How did the plan perform compared to the market, over the last three months? Did we have a good quarter or a bad quarter?

The last three months have continued to be dominated by the coronavirus related market turmoil. However, after the steep stock market falls that we saw in March, the second quarter of the year saw some recovery. Although we have seen markets recover to some extent, uncertainty continues to be high, meaning that you may have seen the value of your plan fluctuate over the last three months.

During the first three months of the year, the Plan had gone down by around 16%. As of the end of June, the plan had recovered from some of the losses experienced in March, and was down by just under 6%, on a year-to-date basis.

As a reminder, the aim of the Tracker Plan is to help grow the value of your savings over the long-term. So even though we are seeing some bumps in the road now, it is important not to overreact to short-term shocks.

What can savers expect for the next quarter?

Without ignoring the devastating health impact that the coronavirus has had around the world, we are clearly in the midst of a very challenging period for companies and the economy more generally.

Savers can expect challenges to continue as threats of second wave outbreaks continue to hamper economies. The UK has seen some signs of recovery since March after some easing of lockdown measures. This trend may continue as bars, restaurants and cinemas open up, including a support package announced by the government aiming to kick start the economy.

Whilst we expect a difficult market environment over the next quarter, with many unpredictable factors, I’d like to remind you of the diversified nature of the Tracker Plan. It holds a combination of different types of investments, aiming to limit the extent to which your savings suffer from this market uncertainty, whilst growing the value of your savings over the long-term.

How has State Street Global Advisors driven positive social change in the past quarter?

We drive positive social change to the companies that the plan holds through engaging with them and voting on resolutions at company annual general meetings. Our aim is to promote positive changes to the environmental, social and corporate governance practices that the plan invests in.

We recently engaged with Tesco plc, and discussed how strong corporate culture is vital to support the company’s ambitious sustainability efforts. Tesco was the first FTSE 100 company to set a target to become a zero-carbon business by 2050. The company has also committed to source 100% of its electricity from renewable sources by 2030, and so far, has achieved 58% of this goal. In our engagement, we found that Tesco’s board places significant focus on the wider culture of the business. Tesco’s sustainability strategy, the “Little Helps Plan”, is inspired by the company’s core values and aims to mobilise all parts of Tesco’s business to focus on the social and environmental challenges that matter most to its customers, employees, suppliers and stakeholders.

In addition, we engaged with Apple Inc ahead of their annual general meeting. We engaged with the company multiple times to discuss the resolution pertaining to “Freedom of Expression and Access to Information Policies”. We determined that the company’s practices could be further strengthened, as certain aspects lagged those of its peers. During our engagement, we encouraged Apple to establish and publish a formal policy statement on human rights. Apple was agreeable to this request and intends to publish a formal statement on human rights with mention of freedom of expression within a year.

Today, there is a global focus on the value of diversity in the boardroom. Diversity is about having a balance of backgrounds and experiences on boards that manage companies. When we engage with companies, the diversity conversation is no longer about “why” we are engaging on the issue. Instead, the focus is “why not” enhance their board by embracing the value of diversity.

Earlier this quarter, we celebrated the Fearless Girl campaign’s third anniversary and International Women’s Day by creating a “Living Wall”, highlighting the number of companies that have added their first female director to their boards since we began our campaign in 2017. The campaign began with us placing a statue of a girl near New York City’s Wall Street and calling on companies to have at least one woman on their boards, failing which, we would take voting action against directors on the board.

After three years of productive engagements and voting, we are pleased to report that since the introduction of Fearless Girl in 2017, 681 companies, or approximately 49 percent of companies identified by State Street Global Advisors, responded to our call by adding a female director.

Your updated fact sheet will soon be available to download in the BeeHive. If you’d like to ask a question in the next update or share your thoughts, you can get in touch with PensionBee via email or Twitter.

As with all investments, past performance is not indicative of future performance and you may get back less than you start with.

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