THE ASANOR ENDOWMENT FUND OCTOBER 2007 REPORT
The figures shown are correct as of October 1, 2007
Conversion rate: One U.S. dollar equals NOK 5.44.
“If one advances confidently in the direction of his dreams, he will meet with a success unexpected in common hours.” Henry David Thoreau
THE GOOD NEWS
In this fiscal year, the ASANOR Endowment Fund gained NOK 66,656 or 6.6%, and now holds total assets of NOK 1,072,240. Counting the grants awarded of NOK 122,193, the Fund has raised a total of NOK 1,194,433.
THE REALLY GOOD NEWS
The EF holds 55% of its assets in dollar denominated investments ($107,818 or NOK 587,506) and the dollar has plunged to 5.44 versus the Norwegian krone (a paper loss of about NOK 50,000 in the last three months alone). In the previous annual EF report, the dollar was valued at 6.18 (and in October 2005 it was 6.44, coincidentally). If 6.18 were the exchange rate now, our total holdings would have increased by NOK 78,809, so that our annual return would have been 14.4%.
THE BAD NEWS
The Endowment Fund doesn’t do bad news.
The fundamental value of EF assets is largely unaffected by currency fluctuations. The corporations held by the 18 mutual funds owned by the EF – eight in dollars, eight in kroner – essentially retain their worth no matter the dollar’s exchange rate. The EF has an investment horizon of forever, and thus can easily coast through even dramatic variations of our base currencies.
This is not at all to say that the EF ignores currency rates. In 2004, the EF held in dollars $49,680; in 2005, $87,782, and in 2006, $96,900. The gain of $20,000 between 2005 and 2007 was due only to market gains; no new dollar investments were made during this time. Instead, the EF took good advantage of kroner investments through Nordea as the Nordic countries outperformed. In addition, the EF’s obligations are Norwegian and paid in earned Norwegian kroner, suffering no exchange-rate penalties.
One day, ages and ages hence (but probably in the intermediate future), we shall not be telling this with a Frostian sigh. The dollar will recover, and then our annual report will show an outsized gain. When that happens, please be modest, because the EF Board will ask you to show the same understanding of currency fluctuations that it hopes you have reading this report.
Our wealth reflects the measure of trust placed in us by our members. If you haven't given yet (or enough) to the Endowment Fund, please help. Remember our rules: ASANOR never asks more from you than kr. 1.000 total. We don't ask you for a contribution year after year. We do ask that you contribute kr. 1.000 during your career, and the sooner the better for you and for ASANOR. Our return record is immaculate: No one has ever lost money contributing to ASANOR.
Robert Baehr, Chairperson.