Value of charity investments rose by 11.4 per cent last year

The WM Charity Fund Monitor finds that equities accounted for most of the increase, but government bonds and cash fared less well

The value of charity investments rose by 11.4 per cent in 2012, according to figures released yesterday by market analysts the WM Company.

The WM Charity Fund Monitor, based on a survey of most major charity investment managers, uses investment data to the end of November 2012 and estimated figures for December based on the movement of the market overall.

The figures compare favourably with 2011, when the value of charity investments fell by 2.7 per cent. Over the last three years, charity investment assets have risen in value by 8.1 per cent, the figures show.

The increase last year was based mostly on increases in the value of equities: UK equities rose in value by 12.3 per cent, and overseas equities rose by 13.1 per cent.

John Kelly, head of client investment at the fund management company CCLA, said that last year had been a good one for equity investments, but a bad one for government bonds and cash.

"Those who continue to hold cash had an incredibly difficult time and it’s unlikely we’ll see an improvement any time soon," he said. "We’re seeing people move away from holding cash, but it’s still very important to the sector. Those who have moved into bonds also saw their returns fade away."

He said that worrying headlines and "significant volatility" made the equity market look uncertain, but the overall story was one of improvement. He predicted further improvements in 2013. "The big picture isn’t going to get better quickly, but it is going to get better," he said.

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