Investment Policy

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Investment Policy

OBJECTIVES

1. To safeguard the value, in real terms, of the assets of the Charity, for future investment in projects.

2. To achieve long-term growth, in real terms, having regard to the requirement for the Charity to satisfy its cash needs.

To achieve these objectives 

a) The Trustees shall be responsible for the management and operation of the Charity’s investment policy.

b) The Trustees, acting as a majority, shall appoint a professional qualified fund manager (“Investment Manager”), with discretionary management powers subject to the terms of the Investment Policy as approved by the majority of Trustees.

c) A reasonable balance of investment shall be maintained between equities, fixed interest securities and commercial properties.

d) Investment in any one equity shall be limited to a maximum of 10% of the equity portion of the portfolio.

1. Investment Performance Objectives

The Trustees have a duty to preserve the purchasing power of the capital and to provide for income generation.

The Trustees shall determine the proportion of assets to be placed under the control of the Investment Manager.

By delegating the investment management activities to the Investment Manager, the Trustees wish the Investment Manager to protect and enhance the value of the portfolio in order to maintain the purchasing power of the funds.

To ensure the performance target is measured and defined, the Trustees wish the Investment Manager to generate a target nett return of 3 - 4%.

The performance of the Investment Manager will be judged over an agreed period. It is important that the services provided are pro-active and good professional relationships are formed between the Investment Manager and the Trustees.

2. Risk Objectives

The Trustees understand that in order to generate overall returns in excess of inflation it will be necessary to expose the portfolio to a medium/low degree of risk.

The Trustees would look to re-consider the investment strategy if the value of the portfolio was to decline, or increase, by more than 10%.

3. Performance and Risk Monitoring reporting

In order to ensure the return and risk guidelines are adhered to, the Trustees require quarterly written reports from the Investment Manager in a form to be agreed. The Investment Manager will be required to provide the Trustees with performance, asset allocation and currency allocation data together with copy valuations in accordance with the instructions.

The Trustees shall, in presenting the audited accounts at their Annual General Meeting and the final accounts submitted to the Charity Commission, include reference to any significant change in investment strategy during that year.

4. Tax status of the Trust

As a UK Charitable Trust, the Trust is subject to UK taxation but in most cases, the Trust will pay no tax on its gains or income, assuming it uses the income and gains for charitable purposes.

5. Investment restrictions

The portfolio of investments will avoid direct holdings in companies whose activities do not align with the ethos of Rotary.

There shall be no direct investment in the following categories:

a. Investments that are generally accepted as high risk,

b. Companies involved with armaments or tobacco,

c. Purchase of property,

d. Purchase of foreign currencies.

6. Review of Investment Policy

This Investment Policy can be reviewed and amended at any time should there be any change in the circumstances.

7. Effectiveness of Policy

The Trustees shall review and update this policy annually if required.

RJL Investment policy v2