OXCEL ENDOWMENT INVESTMENT Saamiah Ali | Alistair Barton | Lucia Mkhitarova
Dec 24, 2015
OXCEL ENDOWMENT INVESTMENT
Saamiah Ali | Alistair Barton | Lucia Mkhitarova
The AimWe 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 Methodology1) 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 multidimensionalb. Value each category and perspective
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
Concern 2: Fund Experience
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
Overview:• seek growth of capital
• seek to invest in firms with focus on sustainable practices
• most investment in large companies
Top 10 Holdings: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
2) Google Inc
● sustainable investments● however, still
use huge amounts of energy
Source: google.com
3) Apple Inc.
Source: apple.com● Houses bulk of operations in China;
Foxxcon● 54.5% reliance on coal data centres (April
2011)
1) Cvs Caremark Corp● largest pharmacy in the United States● created a Environmental Leadership
Council in 2007● partners with nonprofits and other
sustainable initiatives
Fund Three: Calvert Social Investment Equity Fund
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
Fund experience 3 5 10
Fund performance 5 6 8
TOTAL POINTS 26 40 38
Awarding Points
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
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
Recommendations for Long Term
Thank you for Listening
Any questions?
ReferencesAbbe SRI Fund:Yahoo! Finance
Winslow Green Growth Fund:Yahoo! Financehttps://www.google.com/finance?q=MUTF:WGGFXhttp://www.stericycle.com/sustainability-commitmenthttp://www.acuitybrands.com/investor-info/corporate-information/~/media/696148dc47b348e69f427ff2a03de529.ashxhttp://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! Financehttps://www.calvert.com/fundHoldings.html?t=2&fund=933 http://info.cvscaremark.com/about-ushttp://google.comhttp://apple.comhttp://www.theguardian.com/environment/2011/apr/21/apple-least-green-tech-companyhttp://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