The Children’s Charity Fund is categorized as a socially responsible or ethical investment fund. The fund is also called a hedge fund in that it is a volatile investment. It involves a high degree of risk by trading in many different markets. A children’s charity fund is no exception. One charity fund, called The Children’s Investment Fund, is a UK-based fund that has long-term investments in companies worldwide. As with most hedge funds, investors are required to commit for long periods of time. This long-term strategy allows the fund to have a greater flexibility in trading and investing, which could lead to higher returns without time constraints. It is a socially responsible fund because its philanthropic focus is on the welfare of children.
While the Children’s Charity Fund invests in many companies worldwide, it limits its philanthropy endeavors to charities that focus on improving the lives of impoverished children. Its primary areas of activity are HIV/AIDS, poverty, health, and education. The fund spends its resources educating and informing the public about the needs of disabled and handicapped children. It also provides referral services for the parents and guardians of disabled children and acts as a children’s advocate. The Children’s Charity Fund focuses on the long-term sustainability of the well-being of children, not just short-term improvement. The Children’s Charity Fund invests in companies that share those same goals. Those companies vary from oil and gas companies to other children’s charities and funds.
With such a strong emphasis on charitable work for children in need, it is easy to forget that the Children’s Charity Fund is a hedge fund. Hedge funds, by nature, are unregulated funds of funds that invest and trade in many different markets based on speculation. Some funds may be heavily leveraged and when coupled with the volatility of the hedge fund’s performance, the level of risk is increased. Hedge funds such as the children’s charity fund tend to incur high brokerage fees.
Socially responsible or ethical funds such as a children’s charity fund are not limited to individual investors. Companies and other charities can invest in ethical funds that are in line with the company’s or charity’s work. A company or charity that supports endeavors to improve the lives of children would find a children’s charity fund a suitable investment. A company or charity that supports cleaner air would find an environmental fund more suitable. The number of funds in which to invest is only limited to the values and ethics of the investor, the financial goals of the investor, and the availability of funds for investments.