4th edition | 2023 in review
Fiduciary Management
Investment Performance Review
This report focusses on the year ending December 2023, covering more than 95% of mandates subject to GIPS® reporting across 14 fiduciary managers (FMs). It explores how FMs have performed amidst the continued volatility and aftermath of the 2022 gilt crisis.
VIEW FULL REPORT
Review highlights
Click on each of the below to read more
Despite a volatile year, most
asset classes had positive returns in 2023. FM mandates with greater exposure to traditional asset classes particularly with passive equity exposure performed better. The favourable environment boosted median performance compared to 2022, but FMs still had mixed results across the board.
Markets rallied
over 2023
De-risking for pension schemes continued, with some being
spurred on following the rise in yields. We question whether the Government's policies and run-on considerations could change the target return range where most schemes converge.
De-risking continues
While market exposure was a
tailwind, FMs weren't able to capture as much of the upside as previous years. Schemes were rewarded for taking investment risk on the whole, but some active strategies detracted from overall performance.
Capturing
the upside
Average liquidity was consistent with 2022 levels, although half of the surveyed FMs changed their liquidity positions in 2023. Interestingly, liquidity both increased and decreased in roughly equal numbers, with FMs being more deliberate and measured.
Liquidity
changes
FMs identified market turbulence as the top challenge for trustees in 2024. Environmental, social and governance (ESG) and climate change fell to the bottom, indicating changing priorities or that it's no longer perceived as a challenge.
Key challenges for 2024
In 2022, we asked FMs to verify
their GIPS® data to increase
credibility. This year, 60% of FMs restated some previous years’ performance numbers. Pleasingly three FMs verified their data by a third party in 2023, with none of these restating any previous data.
Be careful
with data
Download full report
Download full report
Performance
Mixed results over 2023
8%
6%
4%
2%
0%
-2%
-4%
-6%
0.5% - 1.5%
1.5% - 2.5%
2.5% - 3.5%
Target return above liabilities
Performance was better in 2023, but results were mixed across the market. Despite the positive market backdrop, the higher returning composites struggled, and had greater dispersion. The difference in median return across composites was small, highlighting that FMs were only slightly rewarded for taking higher risk.
Target
1st quartile
2nd quartile
Median
3rd quartile
4th quartile
Download full report
Download full report
Key contacts
We would like to thank the organisations which took part in this year's review:
- Aon
- BlackRock
- Cardano
- Charles Stanley
- Columbia Threadneedle
- Goldman Sachs Asset Management
- Legal & General Investment Management
- Mercer
- Russell Investments
- Schroders Solutions
- SECOR
- SEI
- Van Lanschot Kempen
- Willis Towers Watson
and the Trustee companies that have been quoted throughout the report:
- Capital Cranfield
- Dalriada Trustees
- LawDeb Pension Trustees
- PAN Trustees
- Pi Partnership Group
- Vidett
- Zedra
DOWNLOAD FULL REPORT
DOWNLOAD FULL REPORT