Barings reports that organisations had around £27bn invested in equities in 2003/04, but stock market gains in the interim have meant that the value of those assets now stands at as much as £39.65bn. They have also made up to £3.29bn through unit trusts and common investment funds, Barings said.

Despite these gains, Barings has warned that charities should not lose sight of the need for diversification, as equities account for over 60% of charity investment portfolios.

“The income and fortunes of many charities are closely tied to the stock market,” said James Codrington, head of charities at Barings. “However, despite stock market gains over the last three years, charities should remember their portfolio losses in the early part of this decade. It is important that charities carefully consider a diversification and asset allocation strategy that will meet their future needs.”