I helped launch the Free Enterprise Action Fund (www.FreeEnterpriseActionFund.com), a pioneering mutual fund designed to accomplish two goals for investors:
- Earn a market-based financial return from investing in the common stocks of Fortune 500 companies; and
- Provide a pro-free enterprise, anti-junk science ideological benefit through advocacy that promotes shareholder value and defends the American system of free enterprise from the onslaught of activist-sponsored attacks.
Counter-pressuring corporate managements on global warming/energy availability is a key effort of the Free Enterprise Action Fund. We are sponsoring, for example, global warming-related shareholder resolutions at General Electric, Goldman Sachs and JP Morgan Chase.
I am asking you to consider investing in the Free Enterprise Action Fund and to join our effort to counter corporate managements that are siding with global warming and other social activists.
So how well is Milloy’s fund meeting those two goals?
According to a January 26, 2006 report in the Chicago Tribune, “The fund’s advocacy stance boils down to opposing many of the things supported by traditional ‘social investment funds,’ because issues like global warming or corporate governance distract business from its real role of operating in the best interests of shareholders.” However, its performance as an investment has been less than stellar. The Tribune called it the “Stupid Investment of the Week … Strip away the rhetoric, and you’re getting a very expensive, underperforming index fund, while Milloy and partner Thomas Borelli get a platform for raising their pet issues. … An expense ratio capped at 2 percent–ridiculously high for a portfolio of corporate giants–makes stock market returns unrealistic. From inception on March 1 of last year through Dec. 31, Free Enterprise Action returned 2.32 percent; the S&P 500 returned 4.72 percent. That’s ugly.”
According to the Financial Times of April 1, 2006: “Goldman Sachs investors yesterday overwhelmingly voted down a unique shareholder proposal that claimed the Wall Street bank was misusing shareholder resources by pursuing an potentially expensive pro-environmental agenda. The proposal, submitted for consideration at Goldman’s annual meeting by a small mutual fund firm called the Free Enterprise Action Fund, claimed that Hank Paulson had a conflict of interest in serving both as chief executive of Goldman and chairman of the Nature Conservancy, an environmental group”. For background on this now-soundly defeated proposal…it melted down faster than a Greenland Glacier in 2050, with less than 0.01% shareholder support…
If you really don’t believe in that global warming is happening, I reckon betting against it should be better value than entrusting your money to Milloy
(Hat tip: z)