Editorial: Commingled funds put Tufts at odds with social values

Since the beginning of the Russian invasion of Ukraine, the Tufts community has drawn attention to the fact that Russian securities make up a small but notable portion of the university’s endowment. In the wake of this scrutiny, university representatives have expressed an unwillingness to divest from the four commingled funds Tufts has invested in that include Russian securities because it is “too risky.” Tufts is currently invested in between 80 and 100 commingled funds, a type of pooled fund with assets from multiple accounts that are managed by a third party and not the university. Together, such funds make up the vast majority of the university’s investments.

While the university is seeking to speak with fund managers about minimizing the investments’ exposure to Russian companies, the endowment should be a reflection of Tufts’ priorities, and this is not the first time the university’s investments in commingled funds have put it at odds with upholding social values.

Some might say that Tufts’ divestment from Russian securities would be inconsequential, with little to no impact on the invasion of Ukraine. If Tufts and its peers divest from Russian securities to protest the war, the stocks will leave the hands of institutions under pressure to act in a socially responsible manner only to be bought up by those who simply don’t care what happens. This may be true, but this situation is not about managing the direct impact of Tufts’ investments. After all, Tufts invests very little in any direct holdings, opting instead to work with managers of commingled funds.

This situation is about the philosophy behind Tufts’ investment practices. While the hedge fund  managers who will inevitably buy up stocks following divestment may not share Tufts’ moral code, the endowment should reflect Tufts’ institutional values. As in the case of fossil fuel divestment, the conflict between Tufts’ attitude on a specific moral issue demands its effort to rid itself of any benefit from the financial gain of Russian industries. At the very least, this means being up front about the university’s intentions and abilities as it relates to specific parts of commingled funds. 

Just because Tufts has “no direct exposure” and “minimal indirect exposure” to Russian securities, as Executive Vice President Mike Howard stated, the university should not be excused from providing a statement and updating the community on the issue. The currently available information about this comes from Howard’s comments in a Faculty Senate meeting, which was not an official statement by the university. 

Howard stated that he expects the investments in Russian securities “will continue to decline beyond the $5.7 million,” but the status of this reduction remains unclear. Though the university typically does not issue public statements on the endowment, we encourage clear communication with the community about the status of these investments in the weeks since Howard’s initial Faculty Senate presentation. Such updates will also provide a measure of accountability for the present efforts.

Financial entanglement with Russia is only one of many instances where commingled funds have drawn criticism over responsible investment; in the past, students have criticized the endowment’s exposure to South African Apartheid, fossil fuels and the prison industrial complex. Past conflicts between values and investments surrounding Tufts’ divestment from fossil fuels led to the creation of the Responsible Investment Advisory Group. The RIAG is “a process by which the Tufts community may raise and study concerns surrounding potential social impact caused by investing activities and provide advisory recommendations on such issues to the Investment Subcommittee.”

Given the magnitude of Russian atrocities in Ukraine, we encourage the university to make use of this check on the endowment and conduct a thorough review of exposures to Russian securities. The university currently is working with the investment managers to limit and/or eliminate exposure to Russian securities; however, these negotiations are private conversations with investment managers, which don’t allow for community input or any political statement from the university. Deliberation through the RIAG on how to potentially extricate all assets from Russian connections would demonstrate a commitment to responsible divestment, a willingness to sacrifice financial holdings for moral reasons and an emphasis on the university’s responsiveness to community concerns.

The road to divestment is difficult and may lack an immediate reward, but it is an important consideration given Tufts’ social values. In the case of Russian investments or others, Tufts cannot ignore that its principles are opposed to its current investments or claim that nothing can be done about this situation. Again, full divestment is hard and may not be possible, but the university owes it to its community to explore the possibility further and to strive to reconcile its investments with its philosophy.


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