COIF Charity Funds - CCLA

COIF Charity FundsStructure of the FundsCOIF Charities Investment FundObjective and Benchmark of the FundGeneralThe COIF Charities Investment Fund, consistingof well diversified investments, principallyequities but including other asset classes, aims tobe suitable for up to 100% of a charity’slong-term capital, providing a return that iseven-handed between present and futurebeneficiaries. It is believed that over the longerterm this approach should help to protect bothcapital and income from the effect of inflation.The Fund has two specific objectives linked toits aim, above-average total return and aboveaveragedividend.Total Return Objective and BenchmarkThe Fund aims to provide above-average totalreturn performance through capital and incomereturn combined. The total return performancebenchmark (before management and otherexpenses) for the Fund is the return on theWM Co Charity Fund Service Universe. TheFund aims to achieve above-average total returnover the longer term (measured over rollingfive-year periods).Income Objective and BenchmarkThe Fund aims to pay an above-average annualdividend, relative to the return on UK equities.The benchmark range is an annual dividendyield of between 0.5% and 1.0% greater thanthe yield of the FTSE All-Share Index. The Fundaims to match this benchmark range each year.Investment PolicyInvestmentsThe Fund is invested mainly in equities with awide diversification of good quality holdings inthe UK and overseas. UK and overseas bondsare also held, together with direct propertyinvestments through a holding in the COIFCharities Property Fund. This is in accordancewith the wide investment powers permitted bythe Scheme, in line with the duty to diversifyinvestments and the Fund’s objective.To ensure that investments are suitable, onlyreadily realisable securities, which are traded onthe leading eligible securities markets, arenormally held. Where appropriate, collectiveinvestments, such as investment trusts and unittrusts, are held to secure exposure to smallor specialist sectors of the market. It is onlyin exceptional circumstances that unquoted orunlisted securities are held, and these are notactively traded.The Fund does not invest in futures contracts oroptions but may, subject to certain restrictionsand as a protective measure, undertake forwardcurrency transactions and may invest insubscription warrants in respect of securities.Apart from exceptional circumstances, the cashbalance of the Fund remains within the range of0% to 5%, as set out in the Investment andBorrowing Powers section of the SchemeParticulars.Balance between different kinds of InvestmentThe balance between the different kinds ofinvestment is established by reference to the assetallocation of the performance benchmark and theManager’s judgement of the future returns likelyto be obtained on each asset class. To controlrisk, the variances are regularly monitored andreviewed by both the Manager and the Board.COIF Charities Fixed Interest FundObjective and Benchmark of the FundCOIF Charities Fixed Interest Fund is invested infixed interest stocks so as to provide a highincomeyield. This higher yield can supplementwhere necessary the lower income yield on COIFCharities Investment Fund or other equityinvestments. The Fund is intended for long-terminvestment and offers no protection againstinflation.The total return benchmark for the Fund is theWM Co Charity Fund Service Universe for UKfixed interest stocks, with gross incomereinvested, before deduction of managementexpenses.2