Common Investment Funds (CIFs)

Common Investment Funds (CIFs) are collective investment schemes open to charities in the UK set up by the Charity Commission under section 24 of the Charities Act 1993. They operate as investment vehicles and can register as charities.

In a collective investment scheme, money contributed to the scheme by investors is pooled, and the operator of the scheme typically invests the money in a range of investments, in accordance with the published policy of the scheme.

CIFs provide diversification of investment to reduce risk. They enjoy the same tax status as other charities.
CIFs are similar to authorised unit trusts but, unlike unit trusts, they are not authorised by the Financial Services Authority (FSA).

The fact that CIFs are established by the Charity Commission must not be taken as a “kite mark” of quality, the Commission warns.  The Commission makes no determination or judgement as to whether a CIF provides an acceptable level of risk or an acceptable level of performance.  Investing charities must form their own view with regard to these matters.

As of July 2008, the last sets of annual accounts submitted to the Charity Commission from the 45 commercial CIFs show total assets under management of just over £8.2bn.

n the government’s 2009 Budget, Chancellor Alistair Darling announced that it would consult the Charity Commission on whether it should release responsibility for CIFs and common deposit funds.

Under the new proposals, the funds would be authorised by the FSA and would receive the same security as other FSA-authorised funds in the event of fraud or bankruptcy. Funds would also have to meet FSA standards of management.