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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 nearly £40bn 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 on a five to 10-year view is inevitably more subdued than returns since the global financial crisis,” the report said. “At some point this trend will reverse . . . however, timing that inflection point is impossible.”
It added that current “elevated cash levels” gave it more flexibility “in the near to medium term . . . when listed equity markets are at all time highs”.
Global stock markets posted a third straight year of double-digit gains in 2025 as they shrugged off the turmoil triggered by US President Donald Trump’s trade war and fears of an AI sector bubble. Wall Street’s S&P 500 rose almost 16.5 per cent.
The Wellcome Trust was founded in 1936 after 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 added that another challenge was “exceptional levels” of market concentration, with the dominance of big US tech stocks, the so-called Magnificent Seven, making it harder for asset managers to outperform the index.
“Market concentration continues to be a very striking feature,” Fabian Thehos, managing partner and co-chief investment officer, told the FT. “That creates a difficult backdrop for active management,” he added. The trust’s biggest stock holding is US tech firm Alphabet, and its other top 10 public equity holdings include Microsoft, Amazon, and Apple.
Despite the 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 charity’s investment portfolio value increased to £39.9bn over the period, while total funds, less all liabilities, rose to £35.7bn, up from £33.9bn the previous year.
The annual report said that performance over its financial year “has been reasonably strong, though with expectations for future real returns inevitably trending down,” as a result of higher inflation, lower growth, geopolitical uncertainty and record equity market valuations.