The report, now in its second year, investigated the investment returns of 44 with-profits funds across 24 directive mutual insurers, in order to understand sources of differences in return and observe investment strategy trends.
Results from the survey also show:
• The average returns of mutuals’ with-profit funds was 8.79% in 2014 (increased from 6.23% in 2013)
• The overall return achieved by mutual insurers’ with-profits funds over 2014 ranged from 3.2% to 16.57%, reflecting variations in investment aims and strategies across the funds
• Larger with-profits mutual funds noticeably outperformed smaller mutual funds
• Stock selection was a bigger driver of performance than asset allocation in 2014, highlighting the importance of manager selection and performance
Commenting on the survey findings, Scott Eason, Partner and Head of Insurance Consulting at Barnett Waddingham said:
“The results demonstrate that mutual insurers can generate greater with-profits returns than the larger proprietary funds. However, it also shows that not all funds are equal – the performance of the underlying investment managers is critical in maximising member benefit. We can only see the trend for frequent monitoring of the market participants and the drivers of their success increasing.”
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