qa_shareholder_forum_march_2011

							Q & A Arising from the Shareholder Forum held on 7th March 2011


1) What is the NI Central Investment Fund for Charities?

   The NI Central Investment Fund for Charities (the Fund) was established in 1965 as a Common
   Investment Fund under the Charities Act (Northern Ireland) 1964.

   The Fund aims to provide Trustees with the opportunity to invest all or part of their funds with
   the benefit of expert supervision.

   The Fund operates as a Discretionary Managed Fund. Participating Charities’ investments are
   pooled and are given a proportionate number of shares in the Fund based on the most recent
   monthly valuation (share price). The Fund invests in Fixed-interest securities and selected
   Equities. The allocation between Fixed-interest securities and Equities is reviewed and
   periodically adjusted, in line with the Fund’s investment policy.

2) Who runs the NI Central Investment Fund for Charities?

   The Fund is managed by the Department for Social Development through recognised fund
   managers, and its investment policy is guided by a locally based Advisory Committee
   appointed by the Department, which meets in February, May, August and November each year.

   The Fund is managed by Newton Investment Management Limited (a Mellon Financial
   Company) of Queen Victoria Street, London. Newton are authorised and regulated by the
   Financial Services Authority. Newton was appointed Fund Manager in August 2004 and again
   in February 2009, following a retendering exercise.

3) What are the investment objectives of the NI Central Investment Fund for Charities?

   The objective of the Fund is to achieve an annual income return of 20% more than the Fund’s
   benchmark yield and thereafter long-term capital growth in real terms.

   The Fund Manager has committed to achieving the objectives of the Fund taking into account
   the following investment restrictions:
   - no more than 5% of the portfolio to be invested in any single issue (excluding Government
       Gilts and AAA rated Corporate bonds)
   - no direct investment in tobacco related stocks
   - no investment in securities that are not readily realisable
   - no own company products without prior written approval (approval has been given for a
       holding in Newton Higher Income Fund, with a maximum of 1% permitted at time of
       purchase).
4) How can our Charity invest in the Fund?

   To invest in the Fund, a Charity must be recognised by HM Revenue & Customs as a charity
   for tax purposes.

   In addition, the Department requires the following information:
   - name of the Charity;
   - original documentation from HM Revenue & Customs showing the name of the Charity
       and the charity tax reference number (usually beginning XR or XN);
   - contact details for who should receive information from the Department regarding your
       investment. These details to include:
               o Name
               o Address including postcode
               o Telephone number
               o E-mail address
   - details of the account into which the Department will pay dividends earned on your
       investment. These details to include:
               o Bank name
               o Bank address including postcode
               o Account name
               o Account number
               o Sort code

   Participating charities receive shares in the Fund, with the number of shares allocated by the
   Department being determined by the amount of money being invested and the share price of the
   Fund as at the time of investment.

5) Are there any charges to consider?

   No direct charges relating to the Fund are incurred by participating charities.

   The only remaining indirect charges are:
   - an annual management fee charged by the Fund Manager, which is taken directly from the
      Fund; and
   - brokerage charges on the purchase or sale of holdings in the Fund portfolio, which are also
      taken directly from the Fund

   The Department and the Charities Advisory Committee provide their services on a voluntary
   basis.

6) When are the dividends paid?

   The dividends are paid to shareholders twice a year on 1st June and 1st December and are
   allocated on a per share basis, with the amount received being determined by the number of
   shares owned by each participating charity.

   The December dividend covers the first six months of the Fund’s financial year, October to
   March, while the June dividend covers the payment period April to September.
   The Department calculates dividends earned per share in the Fund on a monthly basis.
   Therefore should you invest in or withdraw from the Fund you will receive the dividend earned
   for each complete month that you are invested e.g. if you withdraw your shares in the Fund
   after the end of December, you would be entitled to the dividend earned during October,
   November and December. This dividend will then be paid on the 1st June as it is the next
   dividend payment date.

7) What is the Yield on the Fund?

   At the 30 September 2009 the yield on the Fund was 4.42%.

   At the 30 September 2010 the yield on the Fund was 4.15%.

   At the 31 December 2010 the estimated yield on the Fund was 3.7%.

   Please note that the yield figures quoted above are for information purposes only, as the yield
   on the Fund will vary according to the income payments received from the underlying
   investments and the overall value of the Fund at any given time.

8) How safe is the Fund?

   Assets of the Fund are ring fenced and legally owned by the underlying shareholders, which are
   the participating charities investing in the Fund.

   There is an investment risk with the day to day movements of global stock markets, which
   affect the values of the assets held in the Fund and are reflected in the monthly price of the
   Fund’s shares as calculated by the Department.

   The Fund is valued on a monthly basis by the Department using information supplied by the
   Fund Manager. The monthly share price as calculated by the Department is posted on the
   webpage www.dsdni.gov.uk/vc-nicif .

   Participating charities can sell their investment in the Fund at any time. Should a charity wish
   to withdraw their holding from the Fund it will be valued at the latest available monthly
   valuation. However, the Fund reserves the right to use the next monthly valuation e.g. in a
   volatile market.

9) What does the Fund invest in?

   The following ethical restriction has been applied to the Fund:
   - no direct investment in tobacco related stocks

   The Fund is invested in the following asset classes:
   - Fixed Interest Securities – this is where money is loaned (usually to the Government or an
      individual company) in return for a fixed amount of income (or interest) over a particular
      time period. Although prices on fixed interest investments go up and down as interest rates
      change, you do know that you will be receiving ‘x’ amount of income per year for ‘y’
      years.
   - UK Equities – refers to the buying and holding of shares of UK stock on a stock market by
      individuals and firms in anticipation of income from dividends and capital gains.
   -    Overseas Equities - refers to the buying and holding of shares of overseas stock on a stock
        market by individuals and firms in anticipation of income from dividends and capital gains.
   -    Cash

   The Table below shows the composite benchmark for the Fund.

         Asset Class       Composite Benchmark % Range %              Benchmark Index Comparator
        Fixed Interest                 25                15 - 35    FTSE Government All-Stocks Index
         UK Equities                   50                35 – 65           FTSE All Share Index
       Overseas Equities               20                15 – 35        FTSE World (ex UK) Index
          Other/Cash                    5                 0 - 10                 7 day cash
                                      100

   The table can be interpreted as follows:
   The UK Equities asset class is set at 50% of the overall Fund; however, the Fund Manager can
   adjust this percentage to take advantage of prevailing market conditions so long as it remains
   within the stipulated range of 35-65%. The performance of the UK Equities asset class is
   measured against how the FTSE All Share Index has performed over the same time period
   adjusted to take account of the percentage of UK Equities in the Fund during that time period.

10) Who should I contact for further information?

   NI Central Investment Fund for Charities
   Lighthouse Building
   4th Floor
   1 Cromac Place
   Gasworks Business Park
   Ormeau Road
   Belfast
   BT7 2JB

   Tel: 02890 829481

   E-mail: nicifc@dsdni.gov.uk

   Webpage: www.dsdni.gov.uk/vc-nicif