Morrill Memorial and Harris Library Investment Committee

Minutes of May 18, 2021 Meeting

Present:  Cindy Stableford, Betsy Ruml, Gretchen Rittenhouse, John Hawkins, Rachel Kurland

Minutes of the 1/19/20 meeting were approved.

Rachel provided an update report for the Library Trustees:

1.    Friends will hold the Book Sale this year.

2.    No big expenses. Are setting aside funds for some plantings.  Interior painting is complete; funded from one of last year’s bequests.

3.    Would like interest (accumulated $760.63 and going forward) from CDs to go to Library operations

4.    Board is awaiting Committee recommendation on socially responsible investing.  Board thinks it makes sense from a social standpoint if it is also fiscally responsible.  John indicated performance is comparable and that there are now many options for funds that screen for issues of concern.

Rebecca reported for the Friends:

1.    The Friends are having success with the May 2021 membership drive, raising $2,120 to date. Both the Book Sale and Holiday Sales are on for 2021.

2.    In 2020, even though there was no book sale or membership drive and only a modified holiday sale, Friends were able to distribute $5,500.35 to the Library: $2600 proceeds from sale of wreaths and raffle, and the remainder in payment of recurring library expenses that the Friends typically support (subscriptions, passes, DVDs, etc.)

Report from the Chair (Cindy):

1.    Transfers carried out as per January meeting: $) $1,237.13 in Restricted Fund income to the Library; and b) $12K from Large Cap Index to International Stock fund.

John began the discussion of ESG funds:

 He thinks that given the Board’s preferences and his research on performance, that the Committee should begin to move assets to more socially responsible investments.  Recommends sticking with Vanguard funds – they have many options.  Betsy reviewed a list of good ESG funds from Vanguard and recommends moving funds from our large cap fund to Vanguard ESG Global Fund (VESGX), which is an equity fund managed by Wellington.  Biggest difference is that the ESG fund has more financial institutions and fewer heavy industries.  A bit more middle market with a higher percentage of international investments (38% v. 16%).  There are options with more US investments.  John had been looking at VFTAX.  John will compare these two and a few other Vanguard options.  All agreed to move funds to a a Vanguard ESG fund– John will review options, confer with Betsy, then will send around suggested action for an e-mail vote by Committee members.

Betsy reviewed the portfolio:

She is recommending reducing the FI allocation target from 30% to 25%, by selling all of the Total Bond Index Fund position and investing more in the Short Term Bond Fund.  John agrees – maybe 20%?  An even small percentage in Fixed Income might be warranted at this time, but since we do not actively manage the portfolio, it seems prudent not to be too aggressive.  With feds keeping interest rates low, that there is “no foreseeable upside in bonds, so the fixed income position really only serves as a buffer to volatility in the stock market”.  Cindy asked if we should be concerned about inflation?  Betsy indicated that she thought that there will be time to respond to significant inflationary changes if they occur.  The change to 25% was approved.  When Betsy and John meet to discuss the ESG investment they will also look at how to allocate the rest of the proceeds from the reduction in the Total Bond Fund position and make recommendations to be approved via email or at an additional meeting. 

The meeting was adjourned. Next meeting is scheduled for Tuesday, January 18, 2021 at 9AM at the Library.

Respectfully Submitted,

Gretchen Rittenhouse

Secretary