The WM Company has released its preliminary UK Charity Fund results for 2004.
According to the survey, charity funds ended the year strongly, gaining 6 percent during the fourth quarter on the back of strong equity performance (especially in Europe ex-UK, Pacific ex-Japan and Emerging Markets) to close up just over 11 percent for the year. Across the full year, the highest equity returns were recorded in Pacific ex-Japan and Emerging Markets – both of which gained around 20 percent – with UK (12.8 percent) and Europe ex-UK (13.8 percent) equities also well into double figures. North America (4 percent) and Japan (8 percent) equity performance suffered from the weakness of the dollar and yen, which fell 7 and 2.5 percent, respectively, against sterling for the year.
UK government bonds, conventional and Index Linked produced returns between 6 and 9 percent for the year, whilst property remained a consistently strong performer throughout 2004, finishing at over 16 percent. There was very little difference in performance for both the quarter and the full year between charity funds constrained by an income requirement or their asset mix and those which have no constraints.
“Equity and bond markets finished the year in good form, and although year-end returns were more modest than those seen in 2003, they are still excellent given the current low-inflation environment,” says George Urquhart, a consultant at The WM Company. “Over the last three years, which is the most typical performance assessment period, charity fund returns are now back in positive territory, with an average return of 2.8 percent per annum.”