Charities' assets increase by £16bn in three years

The value of charities' investment assets has increased by £16bn over the past three years, according to new calculations from Barings Asset Management.

In the financial year 2003/04, UK charities had a total of £27.1bn in equity investments. These are now estimated to be worth £39.7bn as a result of rising stock markets, giving an overall gain of £12.6bn.

Charities have also made £3.3bn on investments in unit trust funds and common investment funds, and a further £577m on British government securities or interest-bearing loans, Barings' analysis suggests.

"We were curious to find out how charity portfolios had performed over what had been a very good period for stocks and shares, and whether or not they had performed along market lines," said James Codrington, head of charities at Barings.

He added that the £16bn increase - equivalent to an annuated return of 12 per cent - was not as high as it could have been. "The £16bn figure represents a 41 per cent gain, whereas some of my portfolios have seen a gain of 52 per cent," he said.

Mark Johnson, director at BlackRock Investment Management, said charities had seen the value of their portfolios improve significantly since 2003.

"For investors in UK equities, the FTSE 100 is still more than 10 per cent behind its all-time high on New Year's Eve 1999," he said. "However, equities offer better value than long-dated bonds, and we would continue to favour them for long-term investors."


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