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INVESTMENT POLICY AND OBJECTIVES The Trust’s investment objectives are “


order t fund


o provide for real increas s in annu ’s captal base in real te


e i rms


to seek total return ove hr t e long term in al grant gving wh


i ile preservn ”. Funds are invested in such a way as to maximise


total return while providing a level of income agreed annually by the Trustees. Research has shown that the ability to apply a total return approach balancing investment return and spending helps to mitigate the impact of any decrease in income.


For the year under review, the funds were invested within a bespoke benchmark recommended by each of the Fund Managers and approved by the Investment Committee and Trustees. The benchmarks aim to provide a yardstick for measuring the success of the investment managers whilst at the same time translating the charity’s circumstances, objectives and willingness to bear risk, into a suitable asset allocation with appropriate diversification to provide protection against falling share prices and increased volatility.


INVESTMENT PERFORMANCE


As stated in the Financial Analysis section of this report, the performance for the year from both Fund Managers reflected the improved market conditions.


SOCIALLY RESPONSIBLE INVESTMENTS Naturally the primary investment objective is to achieve optimal financial returns within the agreed risk parameters and constraints.


i g the


Providing that this objective is not


compromised in the process, the Fund Managers believe that it is also possible to develop a framework that allows a broader range of considerations, including environmental and social issues to be taken into account when selecting investments. Indeed they believe that over time, companies which act in an anti-social or unethical manner will find it increasingly difficult to produce above average returns, whereas quality companies that combine good governance and corporate responsibility by operating at an environmentally and socially sustainable level are far more likely to survive and deliver long term shareholder value.


RESERVES POLI CY


In July 1998 the Savoy Educational Trust realised £36,800,584 from the sale of their shareholding in the Savoy Group plc. This sum formed the capital assets of the Trust and since that date has been invested in a diversified portfolio of investments.


The investment of the capital is the only source of ongoing income and the funds are invested in such a way as to seek total return over the long term in order to provide for real increases in annual grant giving while preserving the fund’s capital base in real terms. This objective helps to protect a core of investments and cash assets to generate income for future year’s grant awards sufficient to meet the needs of present and future beneficiaries.


The Trust sets out an annual budget to ensure, as far as is reasonably possible, that the charity’s annual expenditure objectives can be met, given certain assumptions about the yearly and future income streams. Within the budget there exists the capacity, should the need arise, to curtail activities specifically of those new applications presented at the quarterly meetings. At present the Trustees are able to maintain operating costs at a low


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