50 reflects the obligations placed on the recipients of these grants to meet specific conditions in order for funding to be renewed each year. When evaluating projects and measuring their impact, the Trustees acknowledge that in some cases their grant is one part of a funding mosaic and cannot therefore take sole credit for the project outcomes.
FINANCIAL REVIEW AND RESULTS FINANCIAL ANALYSIS OF THE YEAR Global equity markets made strong gains over the year, as central bank policies remained supportive and concerns over global economic growth tended to recede. These gains were significantly amplified for UK based investors due to the weakening pound with the FTSE All Share generating a total return of +22% and Global Equities +14.8% (+31.7% in GBP terms). Risk appetite returned during the year and neither the UK‘s vote to leave the EU nor Donald Trump’s victory in the US election could shake investor confidence for long. The triggering of Article 50 was so well flagged that it passed without disruption to markets. Indeed, despite further opportunities for political shocks this year, particularly in Europe, broad market volatility has remained at historically low levels. UK Government Bonds generated a total return of +6.6% as the 10 year Government Bond yield moved from 1.4% to 1.1% over the year, although post the Brexit vote the yield fell to nearly 0.5%. Cash returns have again been minimal given a further rate reduction in August by the Bank of England with UK base rate now only +0.25% p.a. UK commercial property values, as measured by the IPD index, rose by 3.5% as the income return was offset by capital values being marginally marked down on the EU referendum vote. Against the positive market conditions, the Trustees report that the value of the Trust’s net assets as at 31st March 2017 was £58,382,150. Investment income for the year totalled £1,480,708. The Trustees derive their income entirely from their investments and whilst acknowledging the strong market rally continue to be fully aware of risks, both geopolitical and economic, particularly the resilience of the recovery and the outlook for inflation which are the key factors in the performance of the different asset classes.
FUND MANAGEMENT All investments held by the charity have been acquired in accordance with the powers available to the Trustees. For the year under review the Trust’s portfolio was managed in equal proportions by Cazenove Capital Management (CCM) and Investec Wealth & Investment Limited. Subject to satisfactory performance the Fund Managers are re-appointed on an annual basis. The Investment Committee and Trustees are mindful of their obligation under the Trustee Act 2000 to conduct periodic independent reviews of their Fund Managers.
INVESTMENT POLICY AND OBJECTIVES The Trust’s investment performance objectives are “to provide for increases in annual grant
giving while preserving the Portfolio’s capital base in real terms using a total return approach”. This is achieved by adopting a moderate approach to risk and investing in a balanced and diversified portfolio of equities, bonds, alternatives and cash. Funds are invested in such a way as to maximise total return while providing a level of income agreed annually by the Trustees.