Safeguarding families’ funds in volatile times

Safeguarding funds

As concerns over the coronavirus hit financial markets, The Golden Charter Trust’s long-term, diversified approach continues to protect plan holders’ funds

On top of the immediate illness, loss of life and day-to-day disruption it has caused, the COVID-19 coronavirus has been a reminder of the effect unforeseen and unquantifiable events can have on financial markets. UK bond yields have fallen to record lows and global stock markets have fallen sharply.

The Golden Charter Trust holds and invests plan holders’ funds to ensure there are sufficient funds to meet the anticipated invoice cost at the time of need. We asked Gareth Howlett, Chair of the Investment Strategy Group of the Trust, about the impact the current market turmoil is having.

Gareth said: “Sharp falls in stock markets are obviously a source of concern, but I want to reassure funeral directors that the Trust’s relatively cautious investment strategy has been effective so far in providing a measure of protection against the worst of the falls.

“As an illustration, recent figures from our investment advisers indicate that when the FTSE index fell by nearly 25%, the reduction in the Trust’s overall value was less than 5%. There is of course no guarantee that this will continue, but it does indicate that our policy of holding a well-diversified portfolio is showing its strength.

“About half of the funds held in the Trust are invested in index-linked Government bonds, which provide an inflation-linked and absolutely secure income stream, and the other half is invested in a wide range of assets of which global equities are just one part.

“We are not in a position where we need to sell equities at distressed prices in order to meet liquidity requirements – indeed, it has been a conscious policy before the current falls took place that we should not be in such a position. The market turmoil may yet have further to go, but as long-term investors with a diversified portfolio we do have a significant degree of protection already in place.

“This is not to say we are treating the situation complacently, or that the Trust is completely immune – we will continue to monitor funding levels attentively and will take such action as we feel is necessary to protect the Trust’s ability to meet funeral directors’ expectations.”

Learn more about the Trust

The Partnership Podcast has two episodes devoted to The Golden Charter Trust. Subscribe to the podcast or visit to hear 10-minute interviews with Trustee Gareth Howlett and, most recently, Actuary Graeme Muir.

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