Report shows Steelman funds not 'terror free'

Sunday, December 19, 2010 | 4:35 p.m. CST

ST. LOUIS — Former Missouri Treasurer Sarah Steelman has encouraged avoiding investing in companies that do business in countries that sponsor terrorism, but a newspaper reports she had also invested in such companies.

The St. Louis Post-Dispatch reports that financial statements show that while she was touting terrorism-free investing, Steelman owned mutual funds that bought stock in companies engaged in activities she had denounced.

Steelman, a Republican, is running for the Senate seat held by Democrat Claire McCaskill. The Post says Steelman owned mutual funds with interest in an oil firm that works in sanctioned nations. Another fund bought a stake in a Russian conglomerate that has an agreement with Iran.

Steelman has sold interest in both funds and says terrorism-free mutual funds should be more widely available.




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Kirt Brinkley December 19, 2010 | 5:39 p.m.

The St Louis P-D reporter got ripped for writing this garbage. Why are you guys doing it too?

(Report Comment)
Laura Johnston December 19, 2010 | 6:58 p.m.

@Kirt Brinkley: Reaction to the Post-Dispatch story had no influence on our decision to publish this story. Given that Sarah Steelman has announced that she's running for U.S. Senate, and that she held a statewide elected office, it seemed newsworthy. Readers are welcome to disagree; we invite conversation at the Missourian.

Laura Johnston, interactive news editor

(Report Comment)
Michael Williams December 19, 2010 | 11:00 p.m.


The article is petty. It shows a lack of knowledge about mutual funds, what they are, how many stocks can be in a fund (100s or more), how often a fund will trade-in and trade-out of a stock, and how often fund owners will know which stocks are owned by the fund and which ones are not...and when. The article says more about the author and the Post Dispatch than the subject.

If Steelman had purchased shares of the individual stocks in question, then that act would have been newsworthy in light of her prior comments. But, a mutual fund?????


You folks should have known this...especially if you have your own retirement fund. So should the AP.

(Report Comment)
Tim Dance December 19, 2010 | 11:31 p.m.

Each fund has a portfolio that breaks down the holdings of the fund. What we have here is an attempt by some of the Republicans to confuse people into thinking that a mutual fund is somewhat of an anonymous fund. If you all have retirement funds than you know from time to time they will send you a tome of what each fund invests in. Sorry, Steelman is just another in a long line of Republican hypocrites. Good job Missourian, don't let these people bully you.

(Report Comment)
Tony Robertson December 19, 2010 | 11:51 p.m.

This reminds me of the ill-informed smear campaign against the Bushes several years ago, over Granddaddy Bush's tiny sliver of interest in a banking company that had done business in Nazi Germany. (A campaign which somehow miraculously excused the larger interest in the same company, owned by the Harrimans, prominent NY Democrats.)

'Tis true that mutual funds send out a prospectus outlining the investments in individual stocks. I'd be willing to bet that many of us own shares in mutual funds that invested in a company that was responsible for the largest pollution disaster in the history of the United States. You know, down in the Gulf last spring. It was in all the papers. Or, in a company wrapped up in the largest corporate accounting scandal in US history. You know, the outfit ol' Paul Krugman advised, rhymes with SchmEnron.

The take-away: this is hardly the "gotcha" shocker the muckrakers will want us to think it is. And, politicians will be well-advised to pay closer attention to the stocks their oft-overlooked mutual funds own.

(Report Comment)
John Schultz December 20, 2010 | 1:14 a.m.

Uh Tim, mutual funds send out a prospectus, at best, once a year, so you might think you were in a terrorist-free, socially-responsible, etc. etc. fund after doing your homework, then learn you're not when the fund manager makes market-based, quarterly, or end of year adjustments.

As a datapoint, my IRA is invested in an income fund that reinvests dividends in three mutual funds. The analysis my investment guy puts together shows the top 25 stocks across all four funds by percentage. Most are recognizable companies and only one differed between 7/31/2010 and 10/31/2010. But when you dig into the individual funds, you can see that keeping tabs of what you own is a bit trickier. I can see the top 15 holdings for each fund, but what does that buy me when they contain 152 stocks, 62 stocks and 232 bonds, 128 stocks and 9 bonds, and 107 stocks respectively, not to mention there will be some churn throughout the year?

(Report Comment)
Tony Robertson December 20, 2010 | 7:59 a.m.

John Schultz has managed to put more sensible analysis into a two-paragraph online comment, than either the STL P-D or the Missourian has, on this subject.

Does Claire own any mutual fund shares? If so, I suppose she more thoroughly mines the prospectae?

(Report Comment)
Gregg Bush December 20, 2010 | 9:05 a.m.

The reason why this is news: "Former Missouri Treasurer Sarah Steelman has encouraged avoiding investing in companies that do business in countries that sponsor terrorism, but a newspaper reports she had also invested in such companies."
Hypocrisy is excused for private citizens. But we can't look the other way when we find elected officials using the "do as I say, not as I do" trumpet.
If she didn't want this to be an issue - she shouldn't have brought it up.
And if that means we throw all the bums out - I'm for it!

(Report Comment)
Michael Williams December 20, 2010 | 9:40 a.m.

As I said, if Steelman had ordered and purchased shares of the individual stocks in question, then that act would CERTAINLY have been newsworthy in light of her prior comments.

But, a mutual fund?????


Total non-story for anyone of any political stripe.

(Report Comment)
Paul Allaire December 20, 2010 | 9:54 a.m.

Send her to Iraq!

(Report Comment)
John Schultz December 20, 2010 | 9:59 a.m.

Gregg, my understanding is that Steelman issued a call for Missouri's money to not be invested in funds that had ties to counties sponsoring terrorism. Public money is different than private money. Some relevant quotes from the Post-Dispatch story:

"In an interview, Steelman acknowledged that her personal holdings included companies that would not have passed the terrorism-free test she employed as treasurer.

"There are not products available to individual investors, so it can't be a cleaner portfolio, unfortunately," Steelman said. "I wish it was."

Part of her aim in office, she said, was to pressure Wall Street to make instruments such as terrorism-free mutual funds more widely available to individuals."

(Report Comment)
Paul Allaire December 20, 2010 | 10:34 a.m.

You know John, I was going to give her a pass until I read that bit of her interview you just posted, where she was talking fluently out of both sides of her mouth. I know that there are "products available".

(Report Comment)
John Schultz December 20, 2010 | 10:55 a.m.

Paul, I'm sure she's all ears. Heck, so am I if you want to post it up.

(Report Comment)
Paul Allaire December 20, 2010 | 11:19 a.m.

Alrighty John, I typed in a couple keywords on google and chose "socially responsible investing" over "ethical investing" and about a hundred other choices and then I found these to be of interest. But this is a small portion of the tip of the iceberg. Many of these sites will lead you to hundreds of others. This took me about two minutes. Have fun.

(Report Comment)
John Schultz December 20, 2010 | 11:48 a.m.

Sorry, guess I wasn't clear. I'm aware of socially-responsible funds; I meant the terrorism-supporting-free-maybe funds that Steelman said aren't available to individual investors.

(Report Comment)
Paul Allaire December 20, 2010 | 12:42 p.m.

Some of the funds that you could find from the links I threw out are so green that they aren't even doing anything with anyone involved in any aspect of the oil business. That would solve the first problem in the article, and probably the second. Of course she could invest in the market directly instead of using a mutual fund. That would also solve any problems.

(Report Comment)
John Schultz December 20, 2010 | 1:22 p.m.

True, but most people don't have enough assets to safely invest in individual stocks without assuming a larger risk, thus the reason for mutual funds.

(Report Comment)
Michael Williams December 20, 2010 | 4:04 p.m.

I'm kinda proud of the creators/managers of the socially-responsible funds. They see a market...even if it doesn't make much damn financial sense....create it, fund it.......and take their FREAKIN' 4.5% OFF THE TOP!!!!!!!!!!

Ahhh, capitalism at it's finest! I love it. Make a lots of money and make a lot of folks feel just fine.

You are absolutely right about why folks choose mutual funds....not many of us have the time-ability to research individual stocks and track them, read quarterly reports and annual reports, assess the fundamentals, assess the sectors, etc....which I'm able to do. So, we buy mutuals.

IMO, SRFs about as useful as a rain garden. "Feel-good, don't do much" kinda stuff. Get's votes, too.

SRF's stuff a lot of pockets, tho.

(Report Comment)

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