Investment knowledge centre

MANAGE YOUR CHARITY'S INVESTMENTS

It’s crucial to review your investments regularly to ensure that you’re making the most of your charity’s funds.

The value of investments may fall as well as rise. You may not get back the full amount that you originally invested. Past performance is not a guide to future performance. There is no guarantee about the level of capital or income returns that will be generated.

REVIEWING PERFORMANCE

If your charity has investments, you should review them regularly to ensure that they continue to support your organisation’s charitable aims.

WHO SHOULD REVIEW OUR INVESTMENTS?

You’ll need to decide internally who should carry out the review, and how often. You should also review your portfolio if:

  • you have any concerns about the performance of your portfolio or your fund managers
  • your charity’s financial situation has changed
  • the economic outlook has changed

Don’t forget

You also need to ensure that your internal review processes are still relevant, or whether they need updating.

WHAT SHOULD THE REVIEW COVER?

How your charity’s investments are performing

Your charity’s trustees should agree on the benchmarks against which to review your charity’s investment portfolio. What these benchmarks are will depend on your charity’s objectives. They could include:

Performance of your fund

Overall performance

What performance did you set out to achieve and how have your funds performed against this expectation?

Returns on your investment

Income and capital returns

What return have you received over a given time frame? Did these returns deliver the results you needed to support your mission?

Risk versus returns

Risk

Are you taking too much risk, or too little?

If funds are underperforming, you’ll need to understand why – and whether you can accept the loss. If funds are overperforming you should ensure that your charity isn’t being exposed to greater risk that your investment policy allows. You can review these in-house, if you have the knowledge, or with an independent financial adviser.

The service provided by the fund manager

This should be carried out independently of the fund manager. If you’re unable to do this in-house you should consult an independent adviser. Find out more about investment advice for charities.

Some things to consider are:

  • how well the manager is performing
  • how good communication is
  • how much admin is required
  • how good the reporting is
  • whether the manager is complying with your investment policy 

TEST NEW INVESTMENTS

Use Investment Explorer to review your investments by creating new model portfolios – without risking your charity’s money.

Research and compare up to 500 funds from a variety of fund managers.

Register for Investment Explorer today

WHAT SHOULD WE DO IF WE’RE NOT HAPPY?

Your trustees should always be prepared to intervene if either the investments aren’t performing well or there is an issue with the fund manager. This could include revising your portfolio or switching to another fund which more closely meets your charity’s needs.

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LEARN MORE ABOUT MANAGING YOUR CHARITY’S INVESTMENTS

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CAF Financial Solutions Limited (CFSL) is authorised and regulated by the Financial Conduct Authority FRN 189450. Registered office is 25 Kings Hill Avenue, Kings Hill, West Malling, Kent ME19 4TA. CFSL is a subsidiary of Charities Aid Foundation (registered charity number 268369).

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