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The Wellcome Trust, one of the world’s wealthiest charitable foundations, is holding elevated levels of cash, citing concerns over record-high equity markets.
The trust, which manages about £40 billion and funds research to tackle global health problems, said in its annual report that equity markets were “expensive”.
“The real return outlook for listed equities over a five- to 10-year outlook is essentially more subdued than returns since the global financial crisis,” the report said. “At some point this trend will reverse… however, the timing of that inflection point is impossible.”
It said existing “enhanced cash levels” gave it greater flexibility “in the near to medium term… when listed equity markets are at an all-time high.”
Global stock markets posted double-digit gains for the third consecutive year in 2025 as they shrugged off turmoil triggered by US President Donald Trump’s trade war and fears of an AI sector bubble. Wall Street’s S&P 500 rose about 16.5 percent.
The Wellcome Trust was established in 1936 following the death of pharmaceutical entrepreneur Henry Wellcome. It focuses on funding scientific research into mental health, infectious diseases as well as climate and health.
The report said another challenge was the “extraordinary level” of market concentration, dominated by large US tech stocks, the so-called Magnificent Seven, making it hard for asset managers to outperform the index.
“Market concentration remains a very important characteristic,” managing partner and co-chief investment officer Fabian Thehos told the FT. “This creates a difficult backdrop for active management,” he said. The trust’s largest stock holding is US tech firm Alphabet, and its other top 10 public equity holdings include Microsoft, Amazon and Apple.
Despite market challenges, the trust returned 10.2 per cent in sterling terms in the year to the end of September. Its charitable spending rose to £1.9bn from £1.6bn a year earlier.
The value of the charity’s investment portfolio rose to £39.9 billion over the period, while total funds, less all liabilities, rose to £35.7 billion, from £33.9 billion the previous year.
The annual report said that as a result of high inflation, low growth, geopolitical uncertainty and record equity market valuations, performance in its financial year “has been quite strong, although expectations for future real returns are inevitably being tempered”.
