Charity investment funds fared well in the third quarter of this year, gaining by more than 7 per cent, according to figures from the WM Company.
The average charity fund has posted a return of 15 per cent for the first nine months of 2005.
Michael Walsh, managing director of WM, said charity investments were performing strongly in the context of a comparatively benign inflation environment.
"Against a background of terrorist activity, natural disasters and high oil prices, equity markets proved most resilient, and with just over three-quarters of their assets invested in equities, this proved highly beneficial for charities," he said.
"With cash delivering returns of only 3.5 per cent, it will have been important for charity funds to be as fully invested as possible."
The highest equity returns - 19.9 per cent - were recorded in Japan.
The UK and Europe posted returns of 8 and 10 per cent respectively. North America saw the lowest equity returns at 5.9 per cent.
Bonds remained flat, with UK government bonds gaining by 0.5 per cent and index-linked bonds showing 1.3 per cent. Property remained consistent at 4 per cent.
The average charity fund has achieved a return of 21.9 per cent over the past 12 months. The return for the past three years is now 16.2 per cent, a return in real terms of 12.5 per cent.
Funds unconstrained by asset mix or income requirement did better in the last quarter because of higher exposure to equities.