Abstracts » Business

An act of trust

Article Abstract:

The 1961 British Trustee Investment Act has come to appear restrictive, and fund trustees are instead to have powers of beneficial ownership, a move that applies to charities' funds. This will affect asset allocation and stock selection, which had been constrained by the act. Investment in overseas assets was also restricted. Common Investment Funds are seen as a special type of investment, so charities can invest in them in the amounts considered to be appropriate.

Management

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Common goals

Article Abstract:

Common Investment Funds (CIFs) are becoming popular for United Kingdom charities wishing to invest and lacking the assets to justify the appointment of a fund manager. There are some 30 CIFs in the UK with total assets of more than 3 billion pounds sterling. The Charity Commission has set out plans to strengthen the regulation of CIFs, which could alter their structure. There are proposals for trustees to be subject to the UK Financial Services Act, for CIFs to include a corporate trustee, and for them to have a fund manager regulated by IMRO.

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Pooled portfolios

Article Abstract:

United Kingdom charities face cost pressures from changes in the tax system and the rising cost of custodial services. Common investment funds (CIFs) are a special type of unit trusts that are geared to the needs of charities. CIFs are not liable for capital gains tax or stamp duty, and can claim tax credit on dividends. Charity fund trustees can decide on the appropriate investment mix. CIFs are a way of reducing administrative costs, and are becoming increasingly popular.

Finance

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