FINANCE NEWS: High equity returns herald recovery in charity fund levels

Charity investments recorded an average return of 11.1 per cent in the second quarter of this year, according to final figures from the WM Company.

The results confirm the strong recovery in charity funds suggested by WM's original estimates for the three-month period between April and June (Third Sector, 16 July).

The results mean that the average charity investment now has a positive return of 6.5 per cent for the year as a whole.

Returns for the 278 funds monitored by WM ranged between 8.4 per cent and 13.9 per cent.

The highest returns were in European and UK equities, which rose by 19.6 per cent and 14.8 per cent respectively. Bonds, cash and property recorded returns of between 1 and 3 per cent.

George Urquhart, a WM consultant, said: "Charity funds have been under considerable pressure over the past few years with negative equity returns and falling bond yields. In addition, a number of charity funds have moved from income generation to a total return strategy. This has resulted in charity funds' spending capability being severely stretched. Therefore, the positive returns this quarter are a welcome relief."

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