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Our investment beliefs

Nest Trustees have established a set of investment beliefs to provide an objective and transparent framework and assist effective internal decision making in a complex environment. These beliefs act as a guide to enable effective delivery of all investment functions.

1. An expert, well-resourced and well-governed in-house investment function will deliver better long-term investment outcomes for Nest’s members than a wholly outsourced solution.

2. Rigorous and careful selection of fund managers and effective monitoring and evaluation of their activities can provide additional value to our members.

3. Strategic asset allocation is the most important contributing factor to long-term performance.

4. Long-term investors earn better returns net of costs as they can invest in assets with higher risk premia, notably equity and illiquidity risk. Nest’s membership profile means we are well positioned to take advantage of this. 

5. Our members have different objectives throughout their time investing with us – carefully evaluating the amount and type of investment risk to take to achieve these objectives, coupled with robust risk management, leads to better outcomes for them. 

6. Investors who are cash flow positive* for long periods can utilise this as an additional source of value. 

7. Incorporating and acting upon climate risk and other environmental, social and governance (ESG) factors is a significant driver of investment outcomes. 

8. Acting as responsible long-term stewards has a positive and broad impact on member outcomes.

9. Building and maintaining Nest members’ trust in our investment approach throughout their time saving with us will support better retirement outcomes.

*Nest has much higher in-flows of contributions than outflows to retirees, for decades to come.