More than one in three workers in the UK save with Nest. Its investment approach is designed to smooth out the ups and downs of market volatility and help its members’ money grow steadily over the long term. The investment approach that it has developed in-house focuses on two key principles: the selection of fund managers for each asset class and active ownership to improve long-term results.

Decisions on the selection of managers depend on careful consideration, market warming and research. Nest only selects asset managers that best align with its values and investment beliefs, which means its members essentially have a wide array of specialists looking after their money as opposed to a select few.

In terms of active ownership, Nest believes that acting as responsible long-term stewards has a positive and broad impact on member outcomes. Where portfolios are well diversified, performance is broadly determined by the global economic systems in which investees operate. Thus, engaging with companies, fund managers and policy makers to improve financial markets and influence the long-term health of these systems is in Nest’s members’ interests and is part of the fund’s fiduciary duty to them.

While Nest’s fund managers generally vote on its behalf, it has its own voting and engagement policy that sets out its expectations of companies. Updated in early 2024, this also outlines its position and expectations to its managers on good corporate behaviour. Nest may use it to hold its fund managers to account on the decisions they make.