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more than $237,300,000, down approximately $2 million from its value at the end of March. He added that the Committee will continue to hold one meeting a year in Washington, and he noted that the death of Mr. Humelsine has left a vacancy on the Committee. Miss Leven pointed out that the conservative payout rate which is suggested will allow the reinvestment of excess dividends and interest into principal. As suggested in the text below, the following motion was approved: 

VOTED that the Board of Regents approves a total return income payout rate of $10.20 per share of the Consolidated Endowment Fund for fiscal year 1990.

*  *  *  *  *

The spring meeting of the Investment Policy Committee was convened in Washington, D.C. at the National Air and Space Museum on April 11, 1989, at 10:00 a.m.  In attendance were Barnabas McHenry, Chairman; Jane Mack Gould; the Honorable Norman Y. Mineta; and John W. English. Smithsonian staff present were Dean W. Anderson, Under Secretary; Ann R. Leven, Treasurer; John R. Clarke, Assistant Treasurer; Shireen L. Dodson, Comptroller; Adele R. Bock, Director, Investment Management Division; and Debra J. Winstead, Senior Investment Analyst. Also present was Phyllis A. Guss, Congressional Liaison Assistant to Mr. Mineta. The Chairman welcomed the Committee and thanked Mr. Mineta and Mr. English for agreeing to serve as the newest members of the Committee. He then introduced Mrs. Anne M. Tatlock and Mr. Charles W. Beck of Fiduciary Trust Company of New York.

Mrs. Tatlock explained Fiduciary's economic outlook -- the economy is slowing, with a 1 to 1.5% GNP growth reduction forecast, driven by the industrial segment of the economy. Consumer issues should remain fairly stable, although a faster rate of inflation is now predicted. Upwards inflation coupled with a slower economy, or "stagflation," will likely depress profits with equity issues suffering as a result.

However, most institutional and endowment portfolios are substantially less than 50% in equities. There could well be a movement from cash and equivalents back into the market, dependent on short-term rates. The Institution's portfolio is presently 65% in equities and has remained in this position for quite some time. Mrs. Tatlock remains comfortable with this allocation for the present, even if the market in general does not favor equities. She expects to increase the fixed income allocation over the longer term.

Mr. McHenry asked to what degree the market was likely to be driven by large corporate takeovers. Mrs. Tatlock replied that 41% of the price performance of the S & P 500 in 1988 was due to takeovers. This will likely