The Merton Council Pensions Committee met on Wednesday 10 December 2025 to review the fund's performance, investment strategies, and administration. The committee noted the increase in the fund's total assets to £1.021 billion and reviewed the performance of various investment portfolios and managers. They also agreed the minutes of the previous meeting.

Quarterly Performance Review

The committee reviewed the Merton Pension Fund's performance for the quarter ending September 2025, as detailed in the Merton Pension Fund Performance Report - Sept 2025. The fund's total assets increased by £33 million during the quarter, reaching £1.021 billion.

The fund achieved an absolute return of +4.1%, outperforming its aggregate benchmark by 0.4% for the quarter. However, over longer periods of 12 months and 3 years, the fund's performance lagged behind its benchmark, with relative returns of -0.5% and -2.3% per annum, respectively. Despite this, the fund outperformed the actuarial target over 3 months, 12 months, and 3 years.

Global equities showed strong positive returns, driven by optimism regarding potential US interest rate cuts and easing trade tensions. Growth stocks, particularly in the technology sector, were significant contributors to this positive performance. Emerging Markets & Diversified Growth mandates had positive performance but were slightly below benchmark. Property and social impact investments delivered positive returns but underperformed their benchmarks. Infrastructure and private credit mandates had mixed performance, with Macquarie performing particularly well. The Multi Asset Credit fund with LCIV produced positive returns, outperforming its benchmark by 0.5%.

The Quarterly Performance Review also included an analysis and insights from Hymans Robertson, the fund's investment and performance consultants. According to Hymans Robertson's Q3 2025 Investment Monitoring Report, global equities gained 8.1% due to easing trade tensions, Q2 corporate earnings, AI momentum, resilient growth data and the Federal Reserve's first rate cut of the year. Emerging markets were buoyed by a weaker US dollar and a rebound in Chinese equities.

Most asset classes remained near their target weightings, with global equities being the most overweight class relative to its benchmark. Risk Management Framework (RMF)/Corporate Bonds are currently underweight (-5.5%), but officers are actively working to address this. Preliminary results of the 2025 strategy review were shared with the officers in November 2025.

Minutes of Previous Meetings

The committee approved the minutes of the previous meeting held on 23 September 2025.

Exclusion of the Public

The committee resolved to exclude the public from the meeting during consideration of the investment review update, the quarterly fund and investment managers performance review, and the pension administration performance report, as these items contained information exempt from disclosure under the Local Government Act 1972¹.

Other Matters

The agenda for the meeting also included items such as future meeting dates, an investment review update, an update on pool engagement, and a review of pension administration performance. However, the details of these discussions are not available in the provided transcript, as they were held during the portion of the meeting from which the public was excluded.