Expert view: Making the most of global changes

Inflation, sub-prime, debt, property crashes - it seems that wherever you look, investors have caught the market jitters, and that after an extremely strong period it is all going wrong. Should charities be worried, and what should they do?

Shoring up defences is paramount, because the next year is going to be turbulent. However, there are also new opportunities to be found in the current market.

A period of turbulence is a good time to think long-term. Three current challenges spring to mind: climate change, water as a scarce resource and demographic changes. By 2025, 50 per cent of the world's population will find it difficult or impossible to obtain drinking water. Without clean water, the economic growth of countries such as China is at risk, because many industries cannot continue to produce without it.

In the western world, the percentage of older people is increasing and lifestyles are changing. A third of people in the US are obese and the number of diabetes patients is rising rapidly. Healthy food is becoming a global topic of the future, as is the need for elderly care and medical services.

Meeting these challenges is a fine balancing act for many charities, but they can translate into opportunities from an investment point of view. There are three investment opportunities I want to highlight here that offer charities the chance to gain exposure to companies.

The first is a climate change strategy 'certificate' - a range of stocks - which offers global exposure for investors to companies that are developing sustainable solutions and technologies with the potential to mitigate global climate change.

The second, a water strategy certificate, is a similar investment but focuses on companies that are developing sustainable solutions and products in the water business and therefore have above-average performance potential.

The third is a demographics strategy certificate, which invests in companies in the healthcare, education and nutrition fields. These firms will provide the services and products needed by an ageing society that wants to live longer in better health.

Such long-term strategies would suit charities such as grant-makers with perpetual horizons. However, there are also shorter-term investments that have become good value in the current mayhem.

So ensure your investment manager has positioned your charity's portfolio defensively, but make sure he or she is awake to new opportunities as well. Do not get blinded by the headlines and miss the bigger picture.

- Nicola Donnelly, an investment manager for the UBS Charity Team 

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