Fiduciary manager returns show a wide performance gap despite strong year for growth markets, XPS analysis finds

Fiduciary manager returns show a wide performance gap despite strong year for growth markets, XPS analysis finds

21 May 2026

• Despite strong broad equity market performance, high allocations to equities did not always translate to better performance for fiduciary manager growth portfolios
• XPS identifies a 7.2% performance gap between the strongest and weakest fiduciary management growth portfolios
• Differences between model portfolios and real client outcomes highlight the need for robust oversight

There was a significant gap between the strongest and weakest fiduciary manager growth portfolios in 2025, despite all portfolios delivering positive returns, new research from XPS Group has found.

XPS Group, a leading UK consulting and administration business specialising in pensions and insurance sectors, today publishes its survey titled ‘Fiduciary Manager Review 2026’, reviewing 21 growth portfolios managed by 15 fiduciary managers, and covering over 90% of the UK fiduciary management market.

Despite strong broad equity market performance, high allocations to equity didn’t always translate to the best FM results, showing that portfolio construction, implementation and active management had a meaningful impact on outcomes.

The research found that while all fiduciary managers delivered robust absolute returns in 2025, performance varied sharply across the market. XPS identified a 7.2% gap between the best-performing portfolio, which returned 15.3%, and the weakest, which returned 8.1%. While this is broadly in line with the 7.3% range seen in 2024, it is narrower than the 12.9% gap in 2023, suggesting FMs have been tilting away from more defensive positions in recent years.

According to XPS, the findings demonstrate the importance of selecting the right fiduciary manager and maintaining strong oversight, particularly as more pension schemes become well-funded and shift their focus towards long-term and run-on strategies.

XPS also highlighted considerable variation in FM growth portfolio targets. While most portfolios outperformed their stated targets in 2025, returns ranged from -0.4% below target to 8.1% above it, reinforcing the need for trustees to regularly reassess whether benchmarks remain appropriate and sufficiently challenging.

Further, the data shows some fiduciary managers’ model growth portfolios outperformed the real client portfolios they manage. This shows the importance of looking beyond headline model returns to understand the factors that affect real-world outcomes, including liquidity needs, cashflow requirements and legacy assets that can affect real-world 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.”

The full Fiduciary Manager Review 2026 is available here.

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Methodology

XPS analysed 21 UK fiduciary management growth portfolios managed by 15 fiduciary managers over 2025. The review covers more than 90% of the UK fiduciary management market. Each fiduciary manager supplied monthly returns net of all fees. Performance was compared against a range of benchmarks, including cash, global equities, global corporate bonds, a 60/40 equity-bond portfolio and the diversified growth fund universe.