Covid-19 has been an extraordinary challenge for everyone this year and has highlighted that the charitable mission of the Wellcome Trust has never been more important. Wellcome has been at the heart of the global scientific response to the pandemic, generating, supporting, coordinating and funding vital research. The mission is entirely funded from our investment portfolio, so we are pleased to report that our investment portfolio recorded a total return of 12.3% per cent, or 11.2% after inflation, for the year to 30 September 2020. Charitable expenditure in support of our mission was £1.1 billion and the investment base rose to approximately £29.1 billion.
We have returned 212% per cent cumulative (12.1% per cent annualised) in the decade since September 2010, recording positive returns in each of these years. Returns have been 340% per cent cumulative (7.7% per cent annualised) over 20 years. Since the inception of our investment portfolio in 1985, it has provided a total return averaging 13.7% per cent a year.
We maintain a AAA/Aaa (stable) credit rating. Leverage1 stood at 7.2% at 30th September. There were no new bond issues during the financial year.
On the back of this performance, we aim to maintain the real level of charitable spending for our core activities at current record levels at least until 2022. We will continue to review future allocations in the light of the performance of the endowment and the pipeline of projects suitable for funding.
We saw positive returns in each of the asset classes in which we invest (public equity, private equity, venture capital, hedge funds and property). We also saw meaningful realised gains from hedging activities over both equity indices and foreign exchange markets. All have maintained their strong long-term track records. Sterling strength was a slight headwind to returns this year. Our Sterling exposure remained slightly above our minimum 15% level throughout the period.
Baroness Manningham-Buller, Chair of the Wellcome Trust, said: "I am delighted to report a year of exceptionally strong gains, despite a tumultuous period of extreme disruption caused by the Covid-19 virus. The pandemic has shown that Wellcome’s mission has never been more important. The strong long-term performance of the investment portfolio has provided Wellcome with the means to spend over £10 billion on our charitable activities since I joined the Board. We are grateful to the Investment Team for making this possible."
Nick Moakes, Chief Investment Officer and Managing Partner of the Investment Division at Wellcome, added: "The portfolio has performed extremely well in very challenging circumstances. Our focus has been, firstly on providing ample liquidity to fund the mission, and secondly on ensuring that the portfolio emerged from the crisis in even better shape. Previous sales of low conviction positions and selected portfolio hedges early in the year gave us plenty of liquidity and put us in an excellent place to benefit from the rebound in markets after the aggressive policy response in March. However, double digit real returns are the exception not the norm. We remain prepared for a more difficult environment in the future when extraordinary global economic support measures eventually get withdrawn."
Wellcome Trust Finance plc further announces that a copy of its Annual Report and Financial Statements for the year ended 30 September 2020 has been submitted to the National Storage Mechanism, and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
In accordance with the Disclosure and Transparency Rules, the following information is taken from the Annual Report and Financial Statements for Wellcome Trust Finance plc for the year ended 30 September 2020: