2008 Woodie Awards
Pooled funds fall outside revised ethical guidelines
Megan Rieger, Staff Writer
Issue date: 11/21/06
Last Updated: 12/26/07
At the end of last June, Whitworth had approximately $17 million in assets invested and retained in four equity pooled funds, or approximately 29 percent of the $58 million endowment, according to the quarterly performance summary. That means roughly half of Whitworth's assets invested in stock are in equity pooled funds.
Investing money in pooled funds on behalf of the college is a complex issue, Lawton noted.
"It gets difficult, because you give $1,000 to a fund, and that fund gets $1,000 from 1,000 other funds," Lawton said. "If there's one company in a pooled fund that doesn't meet our guidelines, how do you say Whitworth's funds are or aren't invested in it?"
Pooled funds offer the only practical way for Whitworth to buy stocks on the international market, which have outperformed domestic stocks in recent years, Johnson said.
Pooled funds also bring the college the advantage of assuming a lower risk than when investing in individual stocks. Firms within a pooled fund must meet certain criteria and are often growing aggressively, Lawton said.
"The bet is that overall, as a group, [the stocks] will do well," Lawton said. "There may be one or two that don't do well, but overall, you're going to have a greater return than you would with individual stocks."
Approximately 40 percent of Whitworth's endowment fund is invested in domestic stocks. Each year, endowment investments bring in approximately $2 million in combined earnings used primarily to fund student scholarships, Johnson said.
As the financial environment grew more sophisticated, pooled funds emerged as the preferred investment vehicle for college endowments.
"Even up to the early 90s, when the previous [ethics] policy was last dated," Johnson said, "there was not as extensive a use of mutual funds then as there is today."
Students became active about how Whitworth invested its endowment during the international protest against apartheid in South Africa during the late 1980s. The previous version of the ethics guidelines included a code of conduct for South African businesses.
"[Students] lobbied the Board and let the administration know they thought that Whitworth should not have any investments linked to South Africa," Gordon Jackson said.
Jackson, who is from South Africa, is?a professor of Communication Studies.
Yet the external pressure of drawing stocks out of funds that had dealings with companies in South Africa did not strategically impact its government.
"Many Americans may be inclined to overestimate the contribution that the divestment movement had in ending apartheid," Jackson said. "It completely disregards the massive pressures from within the country that brought the apartheid government to change its ways."
The revised ethical investment guidelines apply to both the college and the Whitworth Foundation.
Investing money in pooled funds on behalf of the college is a complex issue, Lawton noted.
"It gets difficult, because you give $1,000 to a fund, and that fund gets $1,000 from 1,000 other funds," Lawton said. "If there's one company in a pooled fund that doesn't meet our guidelines, how do you say Whitworth's funds are or aren't invested in it?"
Pooled funds offer the only practical way for Whitworth to buy stocks on the international market, which have outperformed domestic stocks in recent years, Johnson said.
Pooled funds also bring the college the advantage of assuming a lower risk than when investing in individual stocks. Firms within a pooled fund must meet certain criteria and are often growing aggressively, Lawton said.
"The bet is that overall, as a group, [the stocks] will do well," Lawton said. "There may be one or two that don't do well, but overall, you're going to have a greater return than you would with individual stocks."
Approximately 40 percent of Whitworth's endowment fund is invested in domestic stocks. Each year, endowment investments bring in approximately $2 million in combined earnings used primarily to fund student scholarships, Johnson said.
As the financial environment grew more sophisticated, pooled funds emerged as the preferred investment vehicle for college endowments.
"Even up to the early 90s, when the previous [ethics] policy was last dated," Johnson said, "there was not as extensive a use of mutual funds then as there is today."
Students became active about how Whitworth invested its endowment during the international protest against apartheid in South Africa during the late 1980s. The previous version of the ethics guidelines included a code of conduct for South African businesses.
"[Students] lobbied the Board and let the administration know they thought that Whitworth should not have any investments linked to South Africa," Gordon Jackson said.
Jackson, who is from South Africa, is?a professor of Communication Studies.
Yet the external pressure of drawing stocks out of funds that had dealings with companies in South Africa did not strategically impact its government.
"Many Americans may be inclined to overestimate the contribution that the divestment movement had in ending apartheid," Jackson said. "It completely disregards the massive pressures from within the country that brought the apartheid government to change its ways."
The revised ethical investment guidelines apply to both the college and the Whitworth Foundation.
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