This article summarizes key investment intentions from the BTPS Trustees Limited’s recently published “Statement of Investment Principles” (October 2025).
Strategic Shift Towards Lower Risk and Liability Matching
The Trustee intends to gradually reduce the level of investment risk over time and increase the matching between assets and liabilities. By no later than 2034, the Scheme aims to be invested in a portfolio predominantly consisting of appropriate bond and bond-like investments. This strategy is designed to provide adequate income plus capital repayments each year to meet benefit payments in full as they fall due. The Trustee plans to steadily build this bond, bond-like, and hedging portfolio over the period to 2034, with flexibility to accelerate if efficient and cost-effective opportunities arise (page 2, Statement of Investment Principles).
Ambitious Net Zero Target Set for 2035
The Trustee has established an ambition for the Scheme’s investment portfolio to achieve net zero carbon emissions by 2035. This objective is intended to improve funding outcomes, with consideration given to ensure that activities undertaken to achieve this ambition do not negatively impact risk-adjusted returns (page 5, Statement of Investment Principles).
Enhanced Hedging Targets for Interest Rate and Inflation Risks
To improve funding stability and provide a balanced risk profile, the Trustee is targeting a ratio of interest rate and inflation hedging of between 90%-100% on a technical provisions basis. This aims to reduce the Scheme’s exposure to these risks and consequently the volatility of its funding position (page 2, Statement of Investment Principles).
Broad Asset Class Considerations for Diversification
The Trustee will invest in a range of asset classes and instruments, including but not limited to: Equity instruments, Bonds and other debt instruments, Private equity and infrastructure, Property and land, Currencies, Cash, Derivatives, and Insurance contracts. The balance between these asset types will be periodically reviewed to achieve short-term and longer-term risk and return objectives through diversification (page 3, Statement of Investment Principles).
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