Finance: New Barings charity fund aims for specific return

Helen Warrell

Barings Asset Management will open a new targeted-return common investment fund for charities in September.

The fund will offer a specific rate of return rather than following a benchmark.

Baring's aim is to deliver headline inflation plus 5 per cent.

This latest initiative is part of a move by Barings to restructure its UK Growth and Income Fund.

"Peer-group benchmarks, based on the average asset allocation of a particular set of funds, can lead to herd-like behaviour," said James Codrington, head of Barings' charity team. "This often means that the structure of a charity's portfolio follows what everyone else is doing, but bears little relation to the charity's own requirements or risk tolerance.

"Following an index benchmark is little better, since indexing automatically overweights regions or stocks that have outperformed and underweights those that are undervalued."

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