The impact of the coronavirus on investment income

09/04/2020
Charity_splash_14.04

Authors

Tom Montagu-Pollock
Co-Head of Charities and Fund Manager

We know income is an important topic for the sector, as voluntary income is under considerable pressure. NCVO estimate that the sector will lose up to £4bn in voluntary income as a result of this crisis, and we are speaking to many clients that are already feeling the impact on their own activities. A survey by NCVO, CFG and the Institute of Fundraising highlight the difficult position many trustees are in; with charities expecting a 48% decline in income at the same time as a 43% rise in demand for their services. Charities are understandably dipping into reserves, this is the rainy day they’ve been saving for, and Foundations and funders are adapting grant making to provide additional support.

The coronavirus crisis and oil price war are having a profound impact on economic growth and the cash position of companies. Many businesses in the most affected sectors such as tourism, hospitality, aviation and retail may have to cut or suspend dividend payments entirely for a period to preserve their cash resources and the viability of their businesses. Any company that has received government assistance to stay afloat, will find it particularly difficult to justify maintaining their dividend payments to shareholders. Even those companies that have ample financial capacity to keep paying dividends at the same level through a temporary profit dip are likely to adopt a cautious approach, given the high level of uncertainty.

In this webinar we ask three experts, from the UK and global equities and UK commercial property to outline their expectations for investment income over the coming 12 months and beyond.

We continue to work with our charity clients to understand the impact of the forecast income falls on individual budgets and how we can best support them. Please get in touch with your usual contact if you have any further questions.

This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. 

Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.

This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.

All data contained within this document is sourced from Cazenove Capital unless otherwise stated.

Authors

Tom Montagu-Pollock
Co-Head of Charities and Fund Manager

The value of your investments and the income received from them can fall as well as rise. You may not get back the amount you invested.