Finance: Common investment funds post better returns after a goodyear

The Chariguard Overseas Equity Fund was the best performing common investment fund in 2005, according to figures released by WM Performance Services.

The fund, which is managed by RCM UK, leads the pack of 38 common investment funds authorised by the Charity Commission, with a total return of 25.9 per cent for the year.

But it did not match the average return of overseas equities for all charities in the WM universe, which stood at 28.3 per cent for the year.

Among other strong performers in 2005 was the Growth Trust for Charities, managed by Cazenove, which invests in UK equities and posted a return of 22.5 per cent. Deutsche Asset Management was recently replaced as fund manager for the CAF UK Equity Growth Fund, but it still posted a reasonable return of 21.5 per cent for the year. However, the vast majority of UK equity common investment funds failed to match the FTSE All Share Index of 22 per cent.

For mixed funds, which invest in both shares and bonds, the top performer was Newton's Global Growth and Income Fund for Charities, which returned 22.3 per cent.

Schroders' Charity Fixed Interest Fund and JP Morgan Fleming's Fledgeling Bond Fund shared top place for gilt and fixed interest funds, both posting a return of 8.1 per cent.

In the property category, the CBF Church of England Property Fund, managed by CCLA, was the most successful of the three common investment funds, returning 17.2 per cent.

John Hildebrand, head of charities at Investec Asset Management, said: "The results reinforce the idea that 2005 was a good year for charities, with most balanced common investment funds producing returns of more than 20 per cent. This is in line with - albeit slightly below - the returns from segregated funds that are measured by WM."

Hildebrand pointed out that the Charishare Tobacco Restricted Fund, managed by Merrill Lynch, produced a return 1.4 per cent below the firm's Charishare Fund, which does not exclude cigarette manufacturers. "This highlights the impact that not holding a specific sector can have on a fund," he said.

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