Poor performance raises challenges

Gill Wadsworth reported on Barnett Waddingham’s Fiduciary Management Review for 2024 this week which found that those managers following an active equity strategy and those with equity protection strategies in place, lagged those with a passive bias.

The research finds that over the five years to the end of 2024, while FM’s median returns were within range at the lower end, Powell says performance was “not outstanding, especially considering the market environment”.

The underperformance was particularly notable for FMs targeting +2.5 per cent to 3.5 per cent liabilities, although there were notable differences between firms. Wadsworth writes that the report is a timely tool for pension schemes as they approach what is likely to be a busy time for fiduciary management tenders, a process that was made mandatory in 2019 following a Competition and Markets Authority (CMA) review which found concerns over lack of competition, high fees and potential conflicts of interest.

AI is the hot topic it seems and we bring you Gurvir S. Grewal, Global Research Analyst, William Blair Investment Management, who writes that the key questions are whether AI will deliver on its financial promises and who will ultimately capture the returns—corporations or consumers. “Outcomes will vary, but we believe today’s multibillion-dollar investments will translate into trillions of dollars of value over time,” he says.

I attended the IMPower Fund Forum event this week, enjoying its 35th anniversary and going as strongly as ever. Read my report from the event, which celebrated innovation in the fund industry, and comments from ARK Invest’s Cathie Wood on AI’s position as a driver for convergence on all fronts.

Beverly Chandler, Managing Editor, Institutional Asset Manager

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