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

On behalf of Mr. Burden, Chairman of the Investment Policy Committee, Mr. Hohenlohe summarized the following committee report which had been distributed in advance. He added that recent market activity has increased the value of the endowment funds from some $77.5 million as of June 30, 1982 to nearly $85 million at present. This represents a 10% increase in total return performance in July and August, approximately equivalent to the performance of Standard and Poor's 500, and raises the annual compounded rate of return over the last four yeras and two months to 13.3%, compared to a rate of 11.3% of the S & P 500. Hence, for the past four years the Smithsonian's annualized endowment return has exceeded not only the major market indexes but also the annual inflation rate of approximately 10%. 

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As of June 30, 1982, the market value of Smithsonian Endowment funds under outside management was $77,411,000 compared to $77,866,000 on March 31, 1982 and $85,693,000 on June 30, 1981. The drop in market value over the last quarter of $455,000 consisted of: (1) interest and dividend income of $619,000 in excess of total return withdrawn of $906,000, including managers' fees (this excess was reinvested into principal); (2) new money of $167,000 deposited with Fiduciary Trust; and (3) market depreciation of $1,241,000 or -1.6% on March 31, 1982 assets. Total return performance (including interest/dividends and market appreciation/depreciation) by individual manager is shown below for various periods ending June 30, 1982; the return for periods exceeding one year is shown on an annualized basis: