SEI Master Trust: Celebrating 15+ years of investment excellence

This is a marketing communication. For Institutional Investors only. Not suitable for further distribution.

2022 was a landmark year for the SEI Master Trust. Following the acquisition of Atlas—a master trust previously owned by pensions administrator, Capita—we grew in assets under management (AUM), whilst simultaneously enhancing our member proposition.  

In this article, we celebrate our heritage as a master trust provider. We look back at some of our milestone achievements, reflecting specifically on the investment expertise that has helped shape our off-the-shelf default strategy.

What does running an ‘investment-led’ master trust entail? And what could this focus help your scheme achieve?

Becoming the UK’s first commercial investment-led master trust

Our unique heritage

Founded in 2007, we are considered one of the UK’s longest-standing commercial master trusts. With over 150 clients and nearly £2 billion in AUM,¹ we provide employers with an end-to-end solution, encompassing everything from investment management and member communication through to administration and governance.

Our mantra, ‘trusted to deliver better member outcomes’, underpins everything we do, acknowledging the pivotal role we play in helping people all over the UK retire better. Ultimately, we believe it is our responsibility to enrich the lives of our members in the fullest sense—by targeting outcomes that benefit not just them, but the society to which they are part.

As investors, our story has been decades in the making. 

¹Source: SEI, as at 31 March 2023

Our journey

Source: SEI

²See Financial Analysts Journal, ‘Determinants of Portfolio Performance’, Vol. 42, No. 4 (Jul- Aug, 1986), pp. 39-44

The Investment Management Unit (IMU) advantage

The SEI Master Trust is the product of our many years’ experience, both as a global investment manager and an adviser to UK pension schemes.

And it is here that it makes most sense to introduce SEI’s Investment Management Unit (IMU). As our dedicated investment arm, the IMU helps to shape our default strategy by conducting rigorous market research and manager due diligence. They also run a number of proprietary funds, some of which we invest in.

Source: SEI. All data is provided as at 31 December 2022. 

How is the IMU structured? And how does the team contribute to the SEI Master Trust? 

Source: SEI. For illustrative purposes.

For schemes partnering with us, the IMU can offer a real advantage.

First and foremost, the team ensure our investment philosophy is upheld. By actively managing the proprietary funds that underpin our default, the IMU acts on our behalf to target risk-adjusted returns over the long term. And there are inherent advantages to this—for a start, a change of sub-adviser does not necessarily mean selling out of assets.

Secondly, the IMU’s investment expertise ensures we have a finger on the pulse. Not only did the IMU design our default, the team also monitors the alpha sources we are exposed to on a daily basis. This gives us the means to pivot away from those that underperform.

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In principle, what does this mean for our default glidepath?

If one of the key advantages of working with the IMU is active management, then it’s worth unpacking exactly what this means for members.

Using academic inputs and the latest in industry thinking, our to-and-through glidepath essentially targets a sustainable income for all, irrespective of age, pot size and/or retirement goals. This means members don’t have to worry about selecting their own funds for drawdown - unless they want to.

The diagram below provides more context. Here, our glidepath gradually de-risks members to retirement, whilst also helping to increase spending power in retirement. No matter what the economic outlook, we aim to provide savers with adequate growth in support of their retirement goals, as the member profile and simulation results make clear: 

Meticulous by design – our glidepath

1) Member profile 

• 45-year old male
• Average salary (c.£50k) and low savings (c.£60k)³

³This individual might have savings elsewhere and is paying a market rate fee of 0.22% total expense ratio (TER).

2) How is our default glidepath designed to increase spending power in retirement?

Past performance does not predict future returns. The value of an investment and any income from it can go down as well as up. For further information on the SEI UCITS Funds please visit our website. Additional information regarding the SSGA Sterling Liquidity Fund is available via the State Street Global Advisors’ website. 

3)  Simulation results 

Based on our glidepath trajectory, the 45-year old member in this example could expect their retirement pot to grow as follows in different market conditions:

Source: SEI, as at 31 December 2022. For illustrative purposes only.

The ‘current’ strategy in this example is a typical multi-asset strategy, which draws down into fixed income and cash upon retirement. ‘Potential’ refers SEI’s to Flexi Default.  Expected risk and return projections using SEI Capital Market Assumptions ("CMA"). Please see below 'Important Information section' for more on SEI CMA's.

Crucially, the 14% improvement in member outcomes suggested above is better than the average scheme’s current default. As such, and to demonstrate our conviction, over the last few years we have transferred all our clients to this model.

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And in practice?

Let’s now turn to the way our default strategy helps to enhance member outcomes in practice.

Last year, Hyman’s Master Trust Default Fund Review found SEI outperformed many peers on both a risk-adjusted and absolute return basis.⁴

We believe this success can be attributed to our conviction as investors. In contrast to many of our competitors, we have remained steadfast in our belief that value stocks will outperform over the long term.

And it’s clear our clients believe in the approach we’ve taken. Tellingly, of the 150 clients we have in the SEI Master Trust, a number of strategic clients have been with us for more than 10 years.⁵

⁴For the three years to 30 June 2022, based on net performance and volatility. See Claire Roarty, Darren Baillie, Callum Stewart, ‘Master Trust Default Fund Review,’ Hymans Robertson, 26 October 2022.

⁵Source SEI, as at 31 December 2022.159 companies in 40 different employment sections.

Important Information

This is a Marketing Communication. This webpage has been created in relation to the SEI Master Trust, an occupational pension scheme which is authorised by the Pensions Regulator. The trustee of the SEI Master Trust is SEI Trustees Limited. SEI Trustees Limited has appointed SEI Investments (Europe) Ltd (“SIEL”) as investment adviser to the SEI Master Trust and pursuant to its investment advisory agreement. This information is issued and approved by SEI Investments (Europe) Ltd (“SIEL”) 1st Floor, Alphabeta, 14-18 Finsbury Square, London EC2A 1BR. This advert and its contents are directed at persons who have been categorised by SIEL as a Professional Client and is not for further distribution. SIEL is authorised and regulated by the Financial Conduct Authority. While considerable care has been taken to ensure the information contained within this webpage is accurate and up-to-date and complies with relevant legislation and regulations, no warranty is given and no representation is made as to the accuracy or completeness of any information and no liability is accepted for any errors or omissions in such information or any action taken on the basis of this information. The information in this webpage is for general information purposes only and does not constitute investment advice. You should read all the investment information and details on the funds before making investment choices. Please refer to our latest Prospectus (which includes information in relation to the use of derivatives and the risks associated with the use of derivative instruments), Key Investor Information Document, Summary of UCITS Shareholder rights (which includes a summary of the rights that shareholders of our funds have) and the latest Annual or Semi-Annual Reports for more information on our funds, which can be located at Fund Documents (https://seic.com/en-gb/fund-documents). And you should read the terms and conditions contained in the Prospectus (including the risk factors) before making any investment decision. If you are in any doubt about whether or how to invest, you should seek independent advice before making any decisions. The UCITS may be de-registered for sale in an EEA jurisdiction in accordance with the provisions of the UCITS Directive. Past Performance does not predict future returns. Investment in the range of the SEI Master Trust’s funds are intended as a long-term investment. The value of an investment and any income from it can go down as well as up. Investors may not get back the original amount invested. This document and its contents are for Institutional Investors only and not for further distribution.

SEI Capital Market Assumptions

Expected risk and return projections using SEI Capital Market Assumptions. The projections presented within this document are provided for illustrative purposes only. Asset class assumptions are set using a combination of empirical and forward-looking analysis and are designed to be long-term in nature. Assumptions include estimates of annual return, volatility and correlations by asset class, as well as prospective ranges for these values over various time horizons. Changes in assumptions may have a material impact on the simulated performance presented. Past performance does not predict future returns. All projected returns are presented gross of all fees and charges, which will have the effect of reducing the illustrated performance. The CMAs are revisited regularly on a minimum basis to reflect the changes in the market environment. The forecasts shown on those pages are not indicative of the future or likely performance of the portfolios, especially over a short-term time period. CMAs are not predictions of how asset classes will perform or reliable indicators of future performance. The data includes or has been based on anticipated future performance determined using various assumptions. Such forecasts are not a reliable indicator of future performances.