Articles

Purpose and Overview

• The ARC Charity Indices track the performance of discretionary charity portfolios to provide benchmarks for charity trustees and advisors.
• They use data from numerous Sterling-denominated portfolios submitted by investment managers, categorising them based on return volatility relative to equity markets over three years.
• There are four indices:
  1. Cautious: Low volatility (0–40% of UK equity market volatility).
  2. Balanced Asset: Moderate volatility (40–60%).
  3. Steady Growth: Higher volatility (60–80%).
  4. Equity Risk: High volatility (80–110%).

Key Features

• The indices reflect actual portfolio returns, net of fees, with no fixed asset allocation or class restrictions.
• Performance is measured against peer groups with similar risk profiles, addressing challenges in evaluating manager performance with cash-plus or inflation-plus benchmarks.

Performance Overview

• 2024 Year-to-Date: Equity Risk category showed the highest growth, while Cautious portfolios had lower returns.
• Historic Returns: Long-term performance varies by risk category, with higher risk indices achieving greater cumulative returns since inception (2003).

Risk-Return Insights

• Three- and five-year analyses illustrate the spread of returns for portfolios with similar risk profiles, underscoring the importance of careful manager selection and monitoring.

Data Contributors

• The report includes input from numerous investment managers, highlighting a broad base of industry participation.

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