According to the survey, charity funds suffered during the second quarter, falling 2.6 percent on account of falling global equity market values. However, for the year to date, the average charity fund has still gained 3.8 percent, and for the last 12 months the average return is 16.4 percent. The return for the last three years, the most typical performance assessment period, is 15.3 percent per annum and represents a real return (i.e. return in excess of retail price inflation) in the last three years of around 12 percent per annum for the average charity.

“Following 12 consecutive quarters of positive returns, it was inevitable that Charity Funds would eventually experience a reversal of fortune,” said Michael Walsh , managing director at WM Performance Services . “Although concerns over inflation and US interest rates triggered a correction in world equity markets, Charity Funds are still well placed at the halfway stage for a good 2006.”

During the quarter, equity returns were negative in all the major regions, with the worst declines suffered in Japan (-10.4 percent) and Emerging Markets (-8.8 percent). North America fell by 1.3 percent in local currency terms, but a weak dollar resulted in a fall of 7.5 percent for the sterling investor. UK Equities fell by 1.8 percent, while Continental Europe declined by 4.5 percent.

Bonds, UK Government, corporate and index linked all fell around 1 percent during the quarter. Cash and Property posted positive returns of 1.1 and 4.4 percent, respectively.

There was a small difference in performance for the quarter between charity funds constrained by an income requirement and those which have no such constraints: funds with an income constraint benefited from their higher commitment to Bonds at the expense of Overseas Equities. However, very little difference is reflected over the 12-month and three-year periods.

Notes to Editors
WM Performance Services is one of the world's leading investment performance measurement businesses and is the European performance measurement division of State Street Corporation. Based in Edinburgh, London, Amsterdam, Paris, Frankfurt and Zurich, WM measures more than 5,000 investment portfolios based in the key global investment centres and provides an extensive range of services to support better investment decisions.

State Street Corporation (NYSE: STT) is the world's leading specialist in providing institutional investors with investment servicing, investment management and investment research and trading. With $10.7 trillion in assets under custody and $1.5 trillion in assets under management (as at 31 March 2006), State Street operates in 26 countries and more than 100 geographic markets worldwide. For more information, visit State Street’s web site at www.statestreet.com.

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Nick Bone
Penrose Financial
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