Are trustees unknowingly failing in their duty of care by selecting unsuitable investment benchmarks? And if so, are they losing money as a result?

From the evidence we see, it’s rare for a non-institutional charity, for example a private foundation, to use a benchmark which does not disadvantage them. Consequently, many trustees set low performance hurdles for their managers and fail to appreciate how much money they may lose as a consequence. This loss is made worse when considering the effects of compounding, where returns added to capital will generate even greater returns.