Investments

The Henry Smith Charity is a permanently endowed Trust. At present we hold almost £1 billion of assets. We use the profit generated by these investments to fund our grant making. We aim to maintain a permanent pool of investments to fund our work into the future.

The performance of our investments is vitally important to us. If our investments perform well it means we can increase the amount we spend on grant-making. It also means we can preserve the real value of the endowment and ensure the long-term sustainability of the charity.

We aim to spend an average of 4% of our investment portfolio each year on grants; to be sustainable this requires investment returns of at least 4% plus inflation averaged over the long term.

Investment strategy

Our investment strategy is to hold a diversified investment portfolio, with a substantial proportion invested in growth assets (e.g. equities and property) to provide longer term returns, and a smaller proportion in diversifying assets (e.g. bonds, hedge funds and cash) to mitigate market fluctuations and provide an alternative source of funding. Currently we hold around 70% of the portfolio in growth assets.

Recent investment performance

Investment returns, after deducting fees, were around £140m in 2016. Total returns for the portfolio for 2016 were +16.0%, almost 10% ahead of the long term benchmark of inflation + 4%.

Over longer periods, our investment returns have exceeded the benchmark over the last three years, five years and ten years.