Common Investment Funds
Common Investment Funds
Common Investment Funds (CIFs) are collective investment schemes which are open only to charities and appropriate charitable bodies.. The funds were set up by Schemes made by the Charity Commission under section 24 of the Charities Act 1993. They operate as investment vehicles and are deemed by law to be charities themselves.
CIFs are similar to unit trusts and can provide a tax efficient vehicle through which a charity can diversify their investments to reduce risk and are also administratively simple and cost efficient. They enjoy the same tax status as other charities.
Combined Charitable Funds
At Collins Stewart Wealth Management we manage two CIFs, the Combined Charitable Capital Fund and the Combined Charitable Income Fund. Managed on an absolute return basis, the funds leverage our disciplined investment process and experienced investment specialists to deliver a comprehensive investment solution, coupled with ease of administration, for Charities and their Trustees.
Fund Structure
The Combined Charitable Funds have a fund structure designed to give Charities peace of mind. As well as being managed by professional investment experts, the funds have a Corporate Trustee, who is responsible for overseeing the activities of both the Investment Manager and the Fund Administrator. In addition, the Funds have an appointed Advisory Board, who report into the Corporate Trustee, who are charged with setting investment policy and monitoring the performance of the manager, in light of the policy.
Absolute Return Investing
In general, fund managers seek to produce returns that are better than their peers, fund category, and/or the market as a whole. This relative return approach to fund investing is appropriate in positive markets but if and when markets are negative, outperforming your peers does not carry as much success when your portfolio has reduced in value.
Investing with an absolute return style requires the manager to use the range of investment tools at his disposal to ensure the fund value rises, even in negative markets. Of course, with this capital preservation bias it is likely that the portfolios will not benefit from the full upside when markets are roaring ahead.
We believe that Charities, who rely on their investment portfolios to cover future income requirements, running costs and investment in their chosen cause, require a safe approach to managing their portfolios. As such, both the Capital Fund and the Income Fund are managed on an Absolute Return basis.
Useful link:
www.charitycommission.gov.uk