How we measure how our funds have performed

Defined contribution pensions are designed to be long-term investments and generally speaking, this is how we measure investment performance. In fact, to get a true idea of their performance, we need to see results over a longer period – typically between five to ten years.

The long-term view is important as some of our funds are more volatile than others. When a fund is volatile it means that the value of its assets can change quickly and quite dramatically. Over the shorter term this can mean that funds invested in volatile assets might appear to make sudden gains or losses. However, over the longer term these movements in either direction tend to even out. Generally, we expect more volatile funds to provide higher investment returns over time.

With the support of our specialist investment advisers and fund managers, we carefully measure how our funds perform using ‘benchmarks’.

Our governance structure

As the Trustees who look after the Fund, we are confident that we have a robust structure in place that carefully monitors the performance of our funds. We review fund performance every three months, through the Defined Contribution Committee (a sub-Committee of the overall Trustee Board with a specific role to look at the DC arrangements), and with the support of our investment advisers.

If we were concerned about past or future fund performance, or felt that our funds were unlikely to meet their benchmarks long term, we would consider investing in different funds.

What is a benchmark?

A benchmark is an index that we use as a reference point for fund performance. In a similar way to how the consumer prices index works, a benchmark will also look at a basket of different things. But rather than these being consumer goods and services, a benchmark will measure the performance of the types of assets in that fund.

Each investment fund has a specific strategy in place which sets out what it aims to achieve. The benchmark helps us to measure how well it does that, as well as the risk and volatility levels that the fund might be exposed to.

Fund factsheets

The following fund factsheets from Fidelity give more information about the available funds.

Growth Please note that the Growth fund is only available through the Lifetime Pathway, so you won’t be able to choose it as a self-select option. Equities Property Blended Assets Corporate Bonds Pre-retirement to annuity Pre-retirement to cash Cash Ethical Growth Ethical Consolidation Shariah