How Western Invests in Arms, Tobacco and Oil Companies

Equities

RBC Wealth Management defines equities as pieces of a company, also known as "stocks." When you buy stocks or shares of a company, you're basically purchasing an ownership interest in that company. A company's stockholders or shareholders all have equity in the company, or own a fractional portion of the whole company.

Western’s U.S. equities

Western’s U.S. equities are managed by State Street Global Advisors and J.P. Morgan Asset Management. The SSGA manages large cap U.S. equities and tries to match the S&P 500 index. It also manages U.S. mid cap equities and tries to match the S&P mid cap 400.

International Equities

Western’s international equities are managed by Franklin Tem- pleton Institutional and MFS Investment management. Tem- pleton manages international equities with a bottom-up value process. MFS manages international equities with a bottom-up “growth-at-a-reasonable price” (GARP) process.

Market capitalization

Market capitalization is the total dollar market value of all of a company's outstanding shares. Market capitalization is cal- culated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to sales or total asset figures. (Source: Investopedia)

S&P 500: Unadjusted company market capitalization of US $5.3 billion or more. S&P MidCap 400: Unadjusted company market capitalization of US $1.4 billion to US $5.9 billion.

Equity investments, which account or 65.8 per cent o Western’s total operating and endowment port olio, are managed by third party investment companies and Western does not have direct control over these investments.

Index und

An index fund is a type of mutual fund with a portfolio con- structed to match or track the components of a market index, such as the Standard & Poor's 500 Index (S&P 500). An index mutual fund is said to provide broad market exposure, low operating expenses and low portfolio turnover. (Source: Investo- pedia).

The Standard & Poor's 500 is an index of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P 500 is designed to be a leading indicator of U.S. equities and is employed by other Canadian universities as well.

S&P 400 MidCap index serves as a barometer for the U.S. mid-cap equities sector and is the most widely followed mid-cap index in existence. Stocks in this index represent household names from all major industries including energy, technology, healthcare, financial and manufacturing.

Source: Investopedia

J.P. Morgan Asset Management manages large cap U.S. equities for Western. Large Cap Core 130/30 aims to deliver long-term returns that exceed the S&P 500 Index. According to the National Post, “the fund devotes 1.3 times the capital to the stocks the manager likes and 0.3 times the capital to the stocks the manager doesn't like.”

How Western invests in arms, tobacco and oil companies

Western doesn’t choose what stocks it owns. This is how it works, starting from Western’s total market value of its equities down to the individual companies it has a stake in.

$670,499,731.58 Market value of Western’s equities as of September 30, 2015.

Canadian: Private: $198,719,189.23 $44,055,721.43 United States: International: $213,578,772.05 $214,146,048.87

Managed by Managed by

State Street Franklin MFS Global J.P. Morgan Templeton Investment Advisors Institutional Management

Matches Manages Manages in- Manages in- S&P 500 large cap ternational ternational index and U.S. equities with equities with S&P 400 equities a bottom-up a bottom-up Mid Cap value pro- “growth-at-a- index cess reasonable closely price” (GARP) process

Weapons Weapons Weapons Tobacco •Raytheon •Lockheed •BAE Systems •Japan •General Martin Tobacco Dynamics •Boeing Co Oil •Textron •Raytheon •Kunlun Energy Oil •Northrop •Royal Dutch •Inpex Tobacco Grumman Shell Corporation •Reynolds •Eni S.p.A. American Tobacco •Suncor Energy •Altria Group •Philip Morris International Oil •Exxon Mobil •Chevron Corporation

Tobacco companies

Japan Tobacco Japan Tobacco is one o the biggest tobacco companies in the world. It owns a large number o cigarettes brands including the business o Natural American Spirit and Winston outside the United States.

Philip Morris International Phillip Morris is one o largest international tobacco companies and own six o the world’s top 15 cigarette brands. The company’s top brands include Marlboro, Longbeach and Bond Street.

Altria Group Altra Group is American multinational which is one o the biggest cigarette and tobacco corporations in the world. It owns cigarette manu acturing companies like Philip Morrison USA, John Middleton and NuMark.

Reynolds American Reynolds American is the second largest tobacco company in the U.S. Its subsidiaries produce cigarette brands including New- port, Pall Mall and and Capri.

Weapons manu acturers

Textron Textron is an American multi-industry company. Textron has come under ire recently or the use o its cluster bombs by Saudi orces in Yemen in airstrikes that killed, injured and dis- placed civilians.

Lockheed Martin Lockheed Martin is one o the world’s largest de ense contractors and has built ighter aircras including the F-16, F-22 and and F-35. It works or a number o U.S. agencies involved with surveillance and in ormation gathering including the CIA, FBI, IRS and NSA.

Raytheon Raytheon is an American de ense contractor and drives most o its business rom arms sales. Among other products, it also pro- duces the Tomahawk missiles which have been employed in Iraq, A ghanistan, Syria and Libya wars.

BAE Systems BAE Systems is a British de ence and security company and one o the world’s largest de ence contractors. The company and its subsidiaries develop combat vehicles, small arms ammunition and artillery systems among other products or a host o dier- ent countries.

Oil companies

ExxonMobil ExxonMobil is an American oil and gas corporation. It is the largest international publicly traded oil and gas company in the world and is included in the “Big Oil” group o major oil producers. ExxonMobil has been accused o active global warming denial and spending millions to discredit climate science.

Kunlun Energy Kunlun Energy is an international energy company headquartered in Hong Kong. It is controlled by the China National Petroleum Corporation which is the state-owned Chinese oil and gas company.

Classi ications and market value o Western’s operating and endowed port olio assets

Market Asset Value ($) Mix

Total Equities 670,499,731.58 65.8% Fixed Income Core Fixed Income 162,369,285.54 15.9% Commercial Mortgages 50,431,527.00 4.9% Total Fixed Income 212,800,812.54 20.9% Real Assets Real Estate 32,457,296.68 3.2% Infrastructure 61,609,760.26 6.0% Total Real Assets 94,067,056.94 9.2% Diversifiers Cash 16,082,207.10 1.6% Absolute Return Strategies, Market Neutral Strategies 26,170,053.60 2.6% Total Diversifiers 42,252,260.70 4.1% $1,019,619,861.76 The combined market value of the assets in the operating and endowment portfolio held by Western as of September 30, 2015.

Calendar Year Returns (Gross o Fees) 20 15 10 5 0 -5 -10 -15 -20

Want to know more about Western's investments?

Head online to our website and under the news dropdown menu, choose "public records." There you will find a detailed list of all the companies Western is invested in, as provided to us on March 11. Anyone in the Western community can ask for a list of the companies Western's investments, so if you want more up-to-date information than we have, email vice-president operations and resources Gitta Kulczycki at [email protected] to request your very own copy.

Sources: List of companies provided via email to The Gazette Western University, Board of Governors meeting documents Western University, Financial Services University of Toronto, Office of the President University of Toronto, Financial Services University of British Columbia, Investment Management Trust Inc. S&P U.S. Indices Methodology RBC Wealth Management J.P. Morgan Asset Management Investopedia

Full list of sources, including links are available with the online version of this article.