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5

Report of the Investment Policy Committee
Mr. Burden stated that at its meeting on April 26, 1972, the Investment Policy Committee first reviewed the performance of our three investment managers. He presented his summary of the changing market values from June 30, 1971, to March 31, 1972, Of the four investment funds (see attached table). The summary also sets forth the income from these funds and indexes of performance during the period, both for appreciation alone ("Value Index") And for appreciation plus dividend and interest yield ("Total Accomp.").
During the nine-month period ending March 31, 1972, The total appreciation and yield realized on the Dow-Jones Industrial Averages was 8.2% and for Standard and Poor's 500 Stock Average was 10.2%. Compared to performance of these averages the following increases were achieved for Smithsonian's investment funds:
Freer Fund 17.5%
Consolidated Fund 15.6%
Special Endowment Fund 6.6%
Endowment Fund #3 15.7%
Performance on the Special Endowment Fund suffered from special constraints against sale of stocks which would result in substantial capital losses in fiscal year 1972. With this exception, our funds thus showed us a substantially better-than-average performance.
All three individual managers out-preformed the averages, particularly T. Rowe Price & Associates which showed a 19.5% increase in its share of the Freer Fund.
Mr. Burden stated that the Committee had then reviewed a recommendation from Mr. Wheeler, Smithsonian Treasurer, that a policy of seeking maximum total return be adopted as the investment goal for