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[[6 column table]]

[[fund]] | [[underlined]] Last Quarter | Last Year | Annualized Last 2 Years | Annualized Last 3 Years | Annualized Last 4 Years [[/underlined]]

Batterymarch | 0% | -5.2% | +10.7% | +11.7% | +12.7%
Fiduciary | +0.8% | -10.6% | +5.7% | +10.2% | +11.7%
Torray | [[underlined]]+0.7% | -5.4% | +11.9% | +11.2% | +13.4%[[/underlined]]
Composite SI | +0.5% | -8.0% | +8.4% | +10.5%* | +11.2%*

DJIA | +0.2% | -11.6% | +2.7% | +4.9% | +5.7%
S&P 500 | -0.6% | -11.5% | +3.3% | +7.8% | + 9.2%
Balanced Fund** | +0.1% | -7.6% | +3.4% | +6.9% | +8.3% [[/table]]

_____
* Includes BEA from 6/30/78 - 12/31/79
** Based on S&P 500 (80.4%); Salomon Brothers Index (11.1%); Treasury Bills (8.4%), reflecting historic asset mix of SI Composite.


During the last quarter, the total return performance of the Institution's three managers has been virtually flat, as has been the performance of the major market averages.  For the four-year period since Torray and Batterymarch were selected by the Smithsonian, their annual compounded returns have been +13.4% and 12.7%, somewhat ahead of Fiduciary (+11.7%), which has now managed Smithsonian funds for over ten years, and measurably ahead of the S&P 500 (+9.2%) and the Dow-Jones Industrial Average (+5.7%).  The annual rate of inflation over this four-year period, as measured by the Consumer Price Index, has been +10.4%.

As shown on attachment A, which sets forth the holdings of the three portfolios, the endowment funds continue to be heavily invested (78%) in common stock; no major shifts have occurred in the past quarter.  The ten largest equity holdings as of June 30, with market values in thousands, were:  Woolworth ($1,142), AT&T ($1,020), Philip Morris ($953), IBM ($917), American Home Products ($898), E Systems ($858), Medtronics ($853), General Dynamics ($840), General Instrument ($837), and Lomas & Nettleton ($814).