Finance: Charity investments gain in first quarter of 2005

Charity investments gained slightly during the first quarter of 2005, according to preliminary results from the WM Company.

The survey, which covers two-thirds of the UK charity fund market, showed that investments grew on average by 2.2 per cent between January and the end of March.

But in the past 12 months charity investments have grown by 13 per cent.

"Compared with the strong returns seen in 2003 and 2004, the first quarter of 2005 produced a fairly modest return," said George Urquhart, consultant at the WM Company.

"But this quiet start to the year is acceptable, given the strong rally in markets during the final quarter of 2004 and the current low-inflation environment. Over the past three years, which is the most typical performance assessment period, charity fund returns are averaging between 2.5 per cent and 3.5 per cent, depending on the investment objective."

The highest equity returns were in the UK and the Pacific, which saw gains of about 3 per cent. However, the US and Japan both dipped slightly into negative territory. Bonds produced negative returns, but property posted a return of 3 per cent.

Richard Brumby, director of UK charitable funds at Credit Suisse Asset Management, said: "Small gains in the Japanese and European markets were reduced by the weakness of the yen and the euro. Against the trend, the dollar strengthened, but not by enough to offset the weakness of Wall Street."

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