Report on master trust default fund performance published

Trustees Agenda posted on 26 September, 2018

Recent research undertaken by Hymans Robertson has compared the investment performance of the default funds used by the largest providers of master trusts. Their report analysed performance across three separate stages of DC investing with differing investment requirements, which they termed the 'growth phase', the 'consolidation phase' and the 'pre-retirement phase'.

The report found that the past year had seen low returns for master trust providers in their default funds, with a median return of just 1.55 for the funds in the growth phase and 1.2% for funds in the consolidation phase.

They also found that in relation to funds in the growth phase, there is a difference in the returns received by the best and worst performing providers of 6% per annum over three years, which Hymans Robertson estimates could result in a 10% difference in the value of those providers' members' DC pension pots.