|
April 03, 2000
TIAA-CREF Offers Two Social Investment Products
The pension fund giant breaks all the barriers, providing a screened mutual fund to individual
investors at a fraction of the usual cost.
SocialFunds.com --
Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF), a pension
provider with approximately $288 billion in assets under management, has been making waves in the
financial world since they began offering public mutual funds in 1997. With the introduction of two
social investment products today, TIAA-CREF is positioned to rock the socially responsible
investing industry as well.
 Two new products launched by TIAA-CREF today, the Social
Choice Equity Mutual Fund and the Social Choice Equity Account (a variable annuity), represent a
strong entry into the social investing market. They were part of a flotilla of nine new investment
products launched today, five mutual funds and four variable annuities, bringing TIAA-CREF's public
no-load offerings to a total of seventeen products.
"TIAA-CREF brings 10 years of social
investing experience to these investment options, given that its investment professionals have been
managing the CREF Social Choice (pension) Account since its inception in 1990," said Dennis Foley,
TIAA-CREF Vice President of investment products. "With more than $4 billion in assets, it is the
largest investment option of its kind in the world."
The new Social Choice Equity Mutual
Fund is a no-load, large-cap index fund, using the same social screens as the Social Choice Account
offered to TIAA-CREF participants for ten years. These include avoidance screens for environmental
damage, alcohol, tobacco, weapons, nuclear energy, and companies that have not adopted the MacBride
Principles for fair employment in North Ireland.
But while the Social Choice Account
offered to participants has a balanced portfolio, including 40 percent bonds, the new Social Choice
Equity Fund offered to the public is 100 percent stocks and is benchmarked to the S&P 500. The new
Social Choice Equity Account, a variable annuity product, has the same investment objective and
benchmark as the new mutual fund.
Perhaps as significant as its social objectives to
some investors, TIAA-CREF's tremendous economies of scale allows them to offer the Social Choice
Equity investment options at very low annual expense ratios. The Social Choice Equity Mutual Fund
has an annual expense ratio of 0.27 percent, well below the average expense ratio for equity index
funds.
"We believe we are satisfying the tremendous need for a social investment option
that is low-cost and has a clearly established, recognizable benchmark in the S&P 500," said Foley.
"Because of the well-defined, absolute investment screens used in the fund and the account,
investors definitely know what type of companies will not be in their portfolios."
TIAA-CREF has been criticized by some participants in the Social Choice Account for limiting
portfolio management to avoidance, or negative, screening. A national campaign, Social Choice for
Social Change: Campaign for a New TIAA-CREF, is calling on the fund managers to invest 5-10 percent
of the account's assets in companies that are positive models of social and environmental
responsibility.
Although the Campaign for a New TIAA-CREF has been met with stiff
resistance by the management, the move to offer Social Choice products to a wider audience is a
positive sign of TIAA-CREF's commitment to socially responsible investing. Along with Vanguard's
imminent entry into the field in May, the Social Choice products will go a long way toward
mainstreaming the interest in social investment.
©
SRI World Group, Inc. All Rights Reserved.
Top
| 
