Charity funds close up 6 per cent for the year

Charity funds have seen a return of 13 per cent each year over the past three years, equivalent to about 9 per cent in real terms, according to State Street Investment Analytics, a provider of financial services to institutional investors.

The figures, which were announced alongside results for the final quarter of 2007, show that funds closed up 6 per cent for the year, despite gaining only 0.5 per cent in the fourth quarter of 2007.

Overseas bonds returned 9 per cent, and conventional and index-linked UK government bonds 5.3 per cent and 8.4 per cent respectively. However, corporate bonds were lower, at approximately 2 per cent.

The year’s highest equity returns were seen in Pacific ex-Japan and Emerging Markets areas, which returned more than 30 per cent. In the major markets, Continental Europe returned more than 6 per cent in local currency terms.

UK Equities returned 5.3 per cent for the year and the North American market returned close to 7.5 per cent in local currency terms. Japan was the area of lowest returns, falling by more than 6 per cent in all.

Property stocks saw the first reversal since 1990, with a return of approximately -3 per cent.

Jeanette Patrizio, head of global services for State Street Investment Analytics, said that 2007 had been highly eventful for investors.

“The early part of the year saw strong equity returns driven by merger and acquisition activity and strong corporate earnings data,” Patrizio said. “The picture has changed dramatically in the wake of the global credit crunch, with uncertainty for market prospects highlighted by dramatically increased levels of volatility.”

Helen Warrell recommends

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