There was a significant gap between the best and worst-performing fiduciary managers during last year, although all delivered positive returns on growth portfolios in buoyant equity markets, according to research from XPS Group.
Its Fiduciary Manager Review 2026 analysed 21 growth portfolios managed by 15 fiduciary managers, covering more than 90 per cent of the UK fiduciary management market.
XPS found a 7.2 percentage point difference between the strongest- and weakest-performing portfolios during the year, with the top-performing strategy delivering returns of 15.3 per cent compared to just 8.1 per cent for the weakest.
Although the spread was slightly narrower than the 12.9 per cent performance gap recorded in 2023, it was broadly in line with the range seen in 2024.
According to XPS, the findings demonstrate that strong equity markets alone were not enough to guarantee outperformance, with portfolio construction, implementation and active management decisions playing a significant role in determining outcomes.
The report noted that high allocations to equities did not always translate into the strongest returns, despite robust market performance during the year.
XPS said the results highlighted the growing importance of fiduciary management oversight as pension schemes increasingly become well funded and begin considering long-term run-on strategies.
The consultancy also identified substantial variation in portfolio targets across the market.
While most fiduciary manager portfolios outperformed their stated objectives in 2025, the extent of outperformance varied significantly, ranging from 0.4 per cent below target to 8.1 per cent above target.
XPS said this reinforced the need for trustees to regularly review whether portfolio benchmarks remain appropriate and sufficiently stretching.
The report also highlighted discrepancies between some fiduciary managers’ model portfolio returns and the actual outcomes achieved for clients.
According to XPS, some managers’ model growth portfolios outperformed the real client portfolios they managed, underlining the importance of examining real-world implementation factors rather than relying solely on headline model returns.
The consultancy said liquidity requirements, cashflow needs and legacy assets could all materially affect client outcomes.
André Kerr, head of fiduciary management oversight at XPS Group, said: “2025 was another strong year for growth assets, and all fiduciary manager growth portfolios delivered positive returns.
“However, our analysis shows there was still a significant gap between the strongest and weakest performers.
“Trustees need to understand not just what return has been delivered, but how that return has been achieved.
“As schemes become better funded and more consider long-term run-on strategies, strong oversight is more important than ever.”
