UK charities' investments lost 19 per cent of their value last year, according to a leading index compiled by State Street, the financial services company. The sharp falls come at a time when charities face lower income from other funding sources, such as legacies, which have been hit by the housing market freeze.

Jeanette Patrizio of State Street Investment Analytics, said: "Although the returns are not surprising, given the global slowdown, we need to remember these are long-term funds and the annual results need to be viewed in context."