Common investment funds
Common Investment Funds (CIFs) are pooled investment funds set up specifically for charities. They are a popular form of investment for charities, and provide access to a range of asset classes (including equity, bonds, property and cash). A selection of CIFs incorporate Responsible Investment criteria.
In this section:
What are common investment funds?
Responsible Investment Issues
How Responsible Investment Operates
Examples
Further information
What are common investment funds?
Common Investment Funds (CIFs) are pooled investment vehicles –similar to unit trusts – specifically set up for charities. CIFs are constituted as charities in their own right. They offer investment opportunities in equities, cash, bonds, property and hedge fund asset classes. Charities in England and Wales can invest in CIFs, and provision has recently been extended to Scotland and Northern Ireland.
Responsible Investment Issues
As CIFs are pooled investment vehicles, the opportunities for a single charity investor to influence the Responsible Investment approach of a CIF may be limited. It is therefore important for trustees to seek information about the Responsible Investment policies employed by the fund and to select a fund that fits with the responsible investment objectives of the charity. Advisers may be able to help charities with this process.
How Responsible Investment operates
Some CIFs employ responsible investment screens and/or have an engagement policy.
A recent survey conducted by the EIRIS/UKSIF Charity Project found that of 32 funds:
- 9 did not include any screens
- 15 screened only for tobacco products
- 8 included screens on issues other than tobacco products
The most common issues considered by the CIFs with multiple screens were tobacco, gambling, armaments, alcohol, pornography, human rights and the environment.
A CIF’s engagement policy, if it has one, is normally the same as the engagement policy of the fund manager across all the funds they manage. Advisers may be able to help charities ascertain which CIF’s engagement approach best fits with the charity’s mission and reflects its issues of concern.
Whilst the number of CIFs employing SEE criteria is growing it remains limited and there is scope for the development of new CIFs which meet other charity concerns.
For a more in-depth assessment of the approach of CIFs towards social, environmental and ethical factors and how they are addressed in their investment process download The Responsible Investment Approaches of Common Investment Funds: A guide for charity trustees
Examples
A selection of CIF examples is given below:
Accommodation Investment Fund for Charities
invests in residential accommodation typically let on long leases to housing associations, government bodies, universities and charities.
Alpha Common Investment Fund for Income and Reserves
employs a number of negative screens and conducts an audit of the “sustainability” of the underlying investments.
Charifaith
aims to reflect Catholic ethos and teaching within its investments.
Further information
Charity Commission: Common Investment Funds - A basic guide to their regulation
Disclaimer:
The featured CIFs have been selected as examples only. The inclusion of a particular fund does not imply an endorsement of it. Moreover, the use of an example does not imply a recommendation of it over any other example or further example used or of any product not listed.
