Sector investments down 7.1% in year's first quarter

WM Performance Services figures show negative returns in every asset class

Charity investments lost 7.1 per cent of their value in the first quarter of 2009, according to final figures released by WM Performance Services earlier this month.

The figures show there were negative returns in every asset class except index-linked bonds, which produced a positive return of 2.4 per cent. The steepest drop was in overseas equities, for which the figures show a loss of 10.1 per cent.

Charity investments in bonds, cash and property also showed negative returns.

The quarterly WM Charity Universes figures show that investment returns dropped by slightly more than their initial estimates, released in April this year, which showed a fall of 6.9 per cent.

Charity assets were still held mostly in equities, with 40.5 per cent in UK equities and 23.5 per cent in overseas equities at the end of the quarter. A further 15.4 per cent was held in UK bonds, and 14.4 per cent in cash and near-cash equivalents.

Figures for common investment funds - collective schemes holding several billion pounds of charity investments - show they made losses in every major asset class except cash.

John Kelly, head of client investment at not-for-profit investor CCLA, said the figures for the quarter covered an exceptionally bad period for charity investments. "The next quarter will look much better," he said. "The markets have returned to more or less where they were at the start of the year."

He said the rally in the markets was based on a movement by investors from an extremely pessimistic approach to a more neutral one.

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