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

Miss Leven reported that as of March 31, 1985, the market value of the Smithsonian's Endowment funds under outside investment management exceeded $141.1 million. This is an increase of $9.6 million from December 31, 1984; appreciation totalling $8.7 million accounted for the greatest portion of this increase. In addition, during the January through March 1985 period, interest and divided income of just under $500,00 was re-invested and approximately $400,000 in new monies was added to the fund. On a composite basis the Endowment Funds grew 7.6% for the period under review. When compared to the standard market indicators, the Smithsonian's funds outperformed the Dow Jones (+5.8%) but did not do as well as the S&P 500 (+9.2%).

The Secretary distributed a letter of May 1, 1985 received from Congressman Clay (copied below with the Secretary's reply). Miss Leven pointed out that the Smithsonian has no direct investments in South Africa. It holds common stock in 47 companies which do business in South Africa. Of the 47, all but 14 have signed the Sullivan Principles. The Regents expressed grave concern regarding South Africa's policy of apartheid. Following much discussion, it was decided that non-signatories should be queried as to their reasons for not signing. Miss Leven noted that, as instructed by the Investment Policy Committee, the Institution will vote all proxies with special attention to matters pertaining to South Africa and other social issues. The question of South African investments will be reviewed again at the next meeting of the Regents.
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