Charity investment portfolios will be "significantly more cosmopolitan and diverse
in five years' time, according to investment managers Chiswell Associates.
Its Compendium of Stock Market Investment for Charities, published this month, predicts that charities will gradually cut their investment in equities in favour of corporate bonds and "alternative asset classes
such as hedge funds, property and private equity.
The Compendium argues that as inflation has fallen, the gap between equities and bonds has narrowed. The corporate bond market has also revived as companies have begun to buy back some of their shares and replace equity with debt in their balance sheets in response to tax changes.
"Equities will still form the core of charity portfolios,
the book suggests.
But new asset classes will become more popular in response to the more flexible approach to investment brought about by the Trustee Act 2000.