The value of charity investment funds rose by slightly more than 11 per cent during 2004, according to preliminary figures from the WM Company.
Investments ended the year strongly, gaining 6 per cent during the final quarter of 2004.
The resurgence of charity funds has slowed slightly following the 17.5 per cent return in 2003, but assets are still making up for ground lost during the stock market crash of 1999-2002.
"Equity and bond markets finished the year in good form, and although year-end returns were more modest than those seen in 2003, they're still excellent given the low-inflation environment," said WM consultant George Urquhart. "Over the past three years, charity fund returns are now back in positive territory, with an average return of 2.8 per cent per annum."
The highest equity returns during 2004 were in the Pacific region (excluding Japan) and in emerging markets, with both categories rising by around 20 per cent. UK equities grew by 12.8 per cent.