Charity funds enjoy good third quarter

Finance | Gareth Jones | 1 Nov 2005

Charity funds had an excellent third quarter, gaining just over 7 per cent on the back of strong equity performance, according to the latest WM figures.

For the last 12 months, the average charity fund has achieved a return of 21.9 percent. The return for the last three years, which is the most typical performance assessment period, is now 16.2 per cent per annum. This represents a real return in the last three years of around 12.5 per cent per annum for the average charity.

During the quarter, the highest equity returns were recorded in Japan (19.9 per cent) and in the Pacific ex-Japan region (11.0 per cent). UK and Europe ex- UK returns were slightly lower, at around 8 and 10 per cent respectively. Even with assistance from a strengthening dollar, North America was the area of lowest equity returns at 5.9 per cent.

It was a fairly flat quarter for bond investments, with returns ranging from 0.5 per cent for UK government bonds to 1.3 per cent for index linked. Property performed at close to 4 per cent.

"Against a background of terrorist activity, natural disasters and high oil prices, equity markets proved most resilient, and with just over three-quarters of their assets invested in equities this proved highly beneficial for charities" said Michael Walsh, managing director of WM. He added that with cash delivering only 3.5 per cent, it will have been important for charity funds to be as fully invested as possible over the period.

WM's charity fund survey is the largest and longest-running study of UK charity fund performance and covers more than two-thirds of the UK charity fund market.

Directory: WM Performance

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