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Newton Investment Management launches annual UK charity investment survey


Newton Investment Management, part of BNY Mellon, has released the findings of its inaugural survey into the investment priorities and positions of some of the UK’s largest charities.

The results will be shared across the broader charity sector in a series of events and will be hosted on a dedicated microsite.
The independent survey was conducted across leaders and decision-makers in the charity sector. Representatives of 74 large UK charities, with combined investment assets of nearly GBP6bn, took part.
The survey found that 65 per cent choose a purely active management approach and 67 per cent are either exclusively or predominantly invested in pooled funds.
A quarter (25.7 per cent) invested in alternative assets, while 60 per cent apply a socially responsible policy, but appetite for social-impact investment remains low.
Portfolio returns and income are the biggest concerns for charities.
Jeremy Wells, investment relationship manager at Newton Investment Management, says: “As a long-standing, active and committed member of the charities sector, Newton felt there was a real need for increased communication around the investment decisions being made by UK charities today. We launched this independent survey to assist in this and will be hosting a series of events to present the findings to the sector. The results will also be hosted on a dedicated website, and we will repeat the survey annually.
“From the results it is clear that an active management strategy is the desired investment approach for charities currently. This is likely to be due to the heterogeneous nature of the sector in terms of investment requirements, particularly with respect to the differing focus on ethically and socially responsible needs. The overriding concern for charities is delivering portfolio returns for their beneficiaries, and this is the driving force for all their investment decisions.”
Alternative assets make up a significant proportion (25.7 per cent) of the investment assets of survey respondents, with the largest single exposure (15.4 per cent) being in the oldest alternative asset class, property. 
Ethical and socially responsible investing is becoming an increasingly important issue for the charity sector, with 60 per cent of charities now applying an ethical exclusion policy to investment portfolios. 75 per cent of respondents considered environmental, social and governance issues to be ‘very’ or ‘quite’ important. Despite this, appetite for social-impact investment is low, as only 11 per cent of charities actually have investments in this area, although 18 per cent do say they would consider such investments in the future. 
Core research results uncovered that the two main issues of concern for respondents in relation to the next three to five years were portfolio returns (55 per cent) and income (25 per cent). Volatility, and risk and return, were much less significant concerns for charities on a medium-term outlook. The study also reveals findings relating to performance benchmarks, how much charities are withdrawing to spend each year, and how attitudes to withdrawals are changing.

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