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[[page number]] -43- [[/page number]]

Report of the Investment 
[[underline]] Policy Committee [[/underline]]

The Investment Policy Committee held its regular semi-annual review meeting with our three investment managers on May 6, 1977, which was attended by William A.M. Burden, Chairman, S. Dillon Ripley, Harold F. Linder, James E. Webb, William Salomon, Donald Moriarty, Charles H. Mott, T. Ames Wheeler, and Christian C. Hohenlohe. Mr. Wheeler read Mr. Burden's report and referred to the attached table and chart providing information on performance, holdings, and income of the Endowment funds.  On March 31, 1977, the total market value of the Smithsonian Endowment Funds was $41,501,000, compared to $44,502,000 on December 31, 1976, and $43,897,000 on June 30, 1971, when the present managers assumed responsibility for investing these funds.

Including interest and dividend income (i.e. total return), and adjusted for additions and withdrawals of capital, the percentage changes of each fund, as well as the major market indexes, are shown below:

[[5-column table]]
 | [[underline]] Last Quarter 12/31/76-3/31/77 | Last 15 Mos. 12/31/75-3/31/77 | Last 27 Mos. 12/31/74-3/31/77 | Since Inception 6/30/71-3/31/77 [[/underline]]
T. Rowe Price | -8.0% | + 5.6% | +34.6% | + 0.7% 
Davis, Palmer & Biggs | -3.8% | +17.4% | +40.6% | +33.4%
Thorndike, Doran, P&L | [[underline]] -6.1% | +11.0% | +37.3% | + 9.6% [[/underline]]
Total Smithsonian Consolidated Endowment | -5.7% | +11.8% | +38.1% | +15.3%
| | | |
[[underline]]Market Averages [[/underline]] | | | |
DJIA | -7.7% | +12.5% | +54.6% | +27.4%
S&P's 500 | -7.7% | +12.9% | +48.9% | +18.8%
Value Line | -1.7% | +28.3% | +75.8% | - 2.6%
[[/5-column table]]