COIF Charity Funds - CCLA

COIF Charity Funds
Structure of the Funds
To ensure that investments are suitable, only readily
realisable securities, which are traded on the leading
eligible securities markets, are normally held. Where
appropriate, collective investments, such as investment
trusts and unit trusts, are held to secure exposure to small
or specialist sectors of the market. It is only in exceptional
circumstances that unquoted or unlisted securities are
held, and these are not actively traded.
The Fund does not invest in futures contracts or options but
may, subject to certain restrictions and as a protective
measure, undertake forward currency transactions and may
invest in subscription warrants in respect of securities.
Apart from exceptional circumstances, the cash balance of
the Fund remains within the range of 0% to 5%, as set out
in the Investment and Borrowing Powers section of the
Scheme Particulars.
Balance between different kinds of Investment
The balance between the different kinds of investment is
established by reference to the asset allocation of the
performance benchmark and the Manager’s judgement of
the future returns likely to be obtained on each asset class.
To control risk, the variances are regularly monitored and
reviewed by both the Manager and the Board.
COIF Charities Fixed Interest Fund
Objective and Benchmark of the Fund
COIF Charities Fixed Interest Fund is invested in fixed
interest stocks so as to provide a high-income yield. This
higher yield can supplement where necessary the lowerincome
yield on COIF Charities Investment Fund or other
equity investments. The Fund is intended for long-term
investment and offers no protection against inflation.
The total return benchmark for the Fund is the WM Co
Charity Fund Service Universe for UK fixed interest stocks,
with gross income reinvested, before deduction of
management expenses.
Investment Policy
Investments
The Fund invests only in Sterling denominated government
and corporate fixed interest securities (including
convertibles and preference shares). A significant
proportion of the Fund, at least 60%, is invested in giltedged
securities in order to achieve a high level of
liquidity and low overall credit risk. The balance of the
Fund is invested in good quality corporate bonds. The
average duration of the Fund’s investments is broadly
similar to that of the FTSE UK Government All Stocks Index
in order to secure a level of income for the longer term.
The Fund only invests in securities which are quoted on
the leading eligible securities markets.
Balance between different kinds of Investment
The minimum proportion of the Fund to be invested in giltedged
securities is reviewed periodically both by the
Manager and the Board. The asset allocation between the
other fixed interest asset classes is varied according to the
Manager’s judgement of risk and the future income and
capital returns likely to be obtained on each asset class.
Apart from exceptional circumstances, the liquidity of the
Fund remains within the range 0% to 5%, as set out in the
Investment and Borrowing Powers section of the Scheme
Particulars.
COIF Charities Deposit Fund
Objective and Benchmark of the Fund
COIF Charities Deposit Fund is designed to enable a
charity to obtain, even on small amounts of money, the
higher rates of interest usually available on large sums in
the London Money Market. The Fund aims to earn a
competitive rate of interest while retaining its Aaa Money
Market rating, the highest available, awarded by Moody’s
Investors Service. The Fund’s benchmark, before expenses,
is the 7-day London Inter-bank Bid Rate (LIBID) as
measured by the British Bankers’ Association.
Investment Policy
The Fund may invest cash only on short-term deposits in
Sterling with Banks, Building Societies and Local
Authorities in the United Kingdom. The Fund must
maintain at least 25% of the investments of the Fund in
deposits repayable within five business days and the
remainder of the investments must be repayable within a
period not exceeding one year. The assets of the Fund are
placed with a list of approved counterparties regularly
reviewed by the Trustees.
Risk Warning
The value of COIF Charities Investment and Fixed Interest
Funds’ units and the income from them can fall as well as
rise and an investor may not get back the amount
originally invested. The Investment Fund’s unit value will
reflect fluctuations in share prices and currency exchange
rates. The Fixed Interest Fund’s income yield is an
indication of the expected level of income. The
corresponding gross redemption yield is an estimate of
total return over the long term. The Fixed Interest Fund’s
income and gross redemption yields are not guaranteed
and will change over time, due to changes in interest rates
and the average maturity date of the securities held by the
Fund. When the Fund’s income yield is higher than the
gross redemption yield, income is being paid at the
expense of capital. The units are intended only for longterm
investment and are not suitable for money liable to be
needed in the near future. They are realisable only on each
weekly dealing date.
The Trustees of COIF Charities Deposit Fund cannot give
guarantees regarding repayment of deposits in the Fund
but undertake to exercise reasonable care in supervising
the placing of deposits. The daily deposit rate will
fluctuate. Past performance is no guarantee of future
returns.
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