Endowment Investment at Oxcel College
This project focuses on helping the trustees of Oxcel College's endowment pursue their investment goals through socially responsible investing and thorough fund analysis. Addressing concerns of social responsibility and fund experience, the methodology includes creating a criteria rubric to evaluate three funds and recommend a plan of action. The project evaluates various aspects such as economic factors, environmental policies, social impact, corporate governance, fund experience, and fund performance to make informed investment decisions.
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Presentation Transcript
OXCEL ENDOWMENT INVESTMENT Saamiah Ali | Alistair Barton | Lucia Mkhitarova
The Aim We aim to help the trustees of the Oxcel College endowment pursue their investment goals: through considering the trustees concerns with socially responsible investing and through research and analysis into the fund options
The Methodology 1) Address the Board s concerns: i) Social responsibility ii) Fund experience 2) Create criteria rubric integrating concerns and sustainable and economic aspects 4) Overview of the three funds 5) Award points using rubric 6) Recommend a plan of action
Concern 1: Social Responsibility The board is concerned about the possible multiple approaches. 1. Investments that have a positive return to society 2. 3 categories defined by board: SRI, green and sustainable funds 3. Our perspective: a. Holistic and multidimensional b. Value each category and perspective
Concern 2: Fund Experience The board requires a fund manager with an excellent reputation for risk adjusted performance: 1. Therefore, we need to consider i) the fund s experience ii) associated risks 2. This is done by assessing the performance of the fund
Criteria Economic Environmental Social Corporate Governance Fund experience Fund performance Focus on alternative energies and technology Environmental policies Absence of Sin stock
Fund One: Abbe SRI Fund Overview: Focus on: socially ethical companies smaller companies (mid, small, micro-cap) Avoid firms with major sin stock investment Investment Analysis: Poor financial reputation Restricted Diversity Focused on Negative Screening
Fund Two: Winslow Green Growth Fund Overview: focus on: o long term capital growth o small domestic (US) companies environmentally orientated investments renewable energy and efficiency technology moving away from its risky reputation Top 10 Holdings Stericycle, Inc. (SRCL) Middleby Corporation (MIDD) Acuity Brands Inc (AYI) Westinghouse Air Brake Tech Corp (WAB) Trimble Navigation Ltd. (TRMB) Verisk Analytics, Inc. (VRSK) LKQ Corporation (LKQ) Clean Harbors, Inc. (CLH) Pentair, Inc. (PNR) Hexcel Corporation (HXL)
Fund Two: Winslow Green Growth Fund 1) Stericycle, Inc. Manage regulated waste and complementary services Initiatives to reduce energy and waste via clean, low impact ways 2) Middleby Corporation Cooking equipment Good business reputation, winning awards for a good growing business 3) Acuity Brands Inc lighting (and solutions) company sustainable focus: reduce waste and pollution, and increase efficnecy technological development zero landfill certification and LEED
Fund Three: Calvert Social Investment Equity Fund Top 10 Holdings: Overview: seek growth of capital seek to invest in firms with focus on sustainable practices most investment in large companies Apple Inc Google Inc Cl A Microsoft Corp Johnson + Johnson Wells Fargo + Co Procter + Gamble Co/The Jpmorgan Chase + Co Pfizer Inc Intl Business Machines Corp Bank Of America Corp
Fund Three: Calvert Social Investment Equity Fund 1) Cvs Caremark Corp largest pharmacy in the United States created a Environmental Leadership Council in 2007 partners with nonprofits and other sustainable initiatives 3) Apple Inc. 2) Google Inc sustainable investments use huge amounts of energy however, still Source: apple.com Houses bulk of operations in China; Foxxcon 54.5% reliance on coal data centres (April 2011) Source: google.com
Awarding Points Criteria Abbe Winslow Calvert Corporate Governance 5 8 7 Focus on alternative energies and tech 3 10 6 Environmental policies N/A = 0 8 5 Absence of Sin Stocks 10 3 2 3 Fund experience 5 10 5 Fund performance 6 8 26 TOTAL POINTS 40 38
Concern 3: Diversification The third concern of the trustees is decreasing the diversification of the endowment: Thus the trustees must consider investing in different funds Diversification is key to maintaining low risk and guarding against poor market performance We recommend diversifying their portfolio based on the short term (within next 5 years) and long term (after 5 years)
Recommendations for Short Term Short Term - next 5 years: Market Performance is key in short term: allows further investment in social responsibility after growth of capital 60% in Colvert Fund, due to their high scores in experience and performance 40% in Winslow Fund, due to their high score overall, and their overall good sustainability focus We decided not to invest in Abbe SRI for the short term, due to their overall low score and their lack of reliability
Recommendations for Long Term Long Term - after 5 years Reassess growth and policies in 5 years Monitor funds Expect to start investing more in Winslow for their high sustainability and projected long term growth in green energy technology/popularity, and less in Calvert Use profit gathered from Calvert to invest in Winslow
Thank you for Listening Any questions?
References Abbe SRI Fund: Yahoo! Finance Winslow Green Growth Fund: Yahoo! Finance https://www.google.com/finance?q=MUTF:WGGFX http://www.stericycle.com/sustainability-commitment http://www.acuitybrands.com/investor-info/corporate-information/~/media/696148dc47b348e69f427ff2a03de529.ashx http://www.altenergystocks.com/comm/content/winslow-green-growth-fund/ http://www.altenergystocks.com/archives/2009/10/green_energy_mutual_funds_compared.html http://www.socialfunds.com/funds/profile.cgi?sfFundId=1030 Calvert Social Investment Equity Fund: Yahoo! Finance https://www.calvert.com/fundHoldings.html?t=2&fund=933 http://info.cvscaremark.com/about-us http://google.com http://apple.com http://www.theguardian.com/environment/2011/apr/21/apple-least-green-tech-company http://www.bloomberg.com/news/2012-06-13/is-apple-the-model-of-a-sustainable-company-.html Image http://www.upenn.edu/pennnews/current/sites/www.upenn.edu.pennnews.current/files/imagecache/article-350/images/GreenFund.jpg
