In this edition, we discuss total return as an
investment strategy, highlight a trustee's responsibilities and
give tips on how to keep employees focused and
happy.
RETURN TO GREATER FLEXIBILITY
For many charities, an economic downturn will mean lower
revenues from their traditional sources. One natural compensatory
reaction may be to seek higher income levels from investment
portfolios.
In the past it was relatively easy to make a small shift from
equities into cash or fixed interest securities to make up any
income shortfall. No more. At the risk of misquoting the prime
minister, Gordon Brown, "desperate needs mean desperate
measures". Trustees could adopt a high risk/high income policy
by chasing poorer quality investments which offer greater income
yields. While this strategy may be appropriate in the short term,
caution is warranted against taking an overly aggressive approach
given that trustees need to demonstrate a duty of care over both
the near and
