Another BDS Hoax?

Rumor has it that another BDS press release is floating around claiming that Harvard University has divested millions in Israeli equities from an emerging market fund.

Before anyone panics, I’m guessing this was part of an anticipated move of Israeli firms out of emerging market programs in the wake of Israel’s joining the OECD (which establishes the Jewish state as a developed vs. Emerging country) than anything political. Since we are long past the time where BDS announcements regarding the motivations of third parties should be taken seriously (remembering last year’s TIAA CREF, Blackrock and Hampshire hoaxes), it’s probably best to stay tuned while some folks are finding out more.

Unless and until someone from Harvard itself declares politics is behind any financial decision, anything emerging from BDS PR should be taken with a 5000 grain of salt.

3 thoughts on “Another BDS Hoax?”

  1. And you guessed right:

    The noise surrounding a perceived rotation out of Israeli stocks by the Harvard endowment is really rather hilarious. Benjamin Joffe-Walt has managed to amass a whole sequence of quotes from people who have no idea what they’re talking about: one person is calling on “all academic institutions in the US” to follow Harvard’s lead and “divest from Israeli war crimes”; a second claims Harvard “still have tens of millions of dollars invested”; and a third comes up with the convoluted explanation that it’s all to do with the fact that Morgan Stanley no longer considers Israel to be an emerging market:

    “There are some funds which invest only in emerging markets,” continued Heen, the Cellcom CFO. “So Harvard had to sell our stock because Israel is no longer classified as an emerging market and they no longer have the ability to hold this stock within the emerging markets fund.”

    Needless to say, university endowments, more than any other investors, are entirely unconstrained by such concerns.

    The fact is that the Israeli holdings itemized in Harvard’s 13-F only added up to $41 million in the first place, or about 0.15% of Harvard’s total endowment. But it’s all pretty meaningless anyway, since the 13-F itself only accounts for a small fraction of the endowment’s total exposure.

    The chances of this move being at all politically motivated are remote: the most recent concerted attempt that Joe Weisenthal can find to get Harvard to divest from Israel dates all the way back to 2002. And I’m sure that if you looked at all endowment 13-Fs on a quarterly basis, you’d find that every quarter a pretty large number of endowments will turn out to have sold out of some small market or other. It’s just that by sheer coincidence, this time it’s the two big hot-button names, Harvard and Israel, and hence there’s lots of headlines.

    Next quarter, or the one after that, a few Israeli holdings are bound to reappear in Harvard’s 13-F. I wonder whether anybody will notice that.

  2. Hey Jon, didn't I say back in May, when Israel was upgraded to developed market, that the BDSers' next claim to victory will be when these stocks start moving out of the emerging market index funds?

    Big disappointment in certain quarters: 'Turns out Harvard did not divest from Israel after all?', but they surely helped publicize Israel's economic success.

    The Globe reports

    Contrary to a blog report, the Harvard University endowment has made no change in its stand on investing in Israel.

    The university disclosed in a securities filing Friday that it had rebalanced some of its $26 billion portfolio in the latest quarter. The changes took place after a firm that manages stock indexes shifted Israel out of an emerging country index into a developed country index in May. Israel was moved from the MSCI to the EAFE index, major indexes that institutional investors use as benchmarks.

    In a statement, Harvard said, “The management company's most recent SEC filing details changes in holdings, as is routine, but no change in policy. The university has not divested from Israel.”

    Harvard Management runs the university's endowment.

    MSCI Inc., which maintains indexes, said that in late May its Israel Index was taken out of the MSCI Emerging Markets Index and became a component of the MSCI World Index.

    Harvard said: “Our emerging markets holdings were rebalanced accordingly. We have holdings in developed markets, including Israel, through outside managers in commingled accounts and indexes, which are not reported in the filing in question.”

  3. You called it alright.

    It still bewilders me that the BDSers keep trying to pass off these easily-exposed, moronic frauds. Perhaps they just assume everyone other than themeselves are fools (see latest posting). Or, perhaps, the audience for these stories is not us, but the BDSers themselves stranded in their fantasy world where fake stories like this are believed in order to give a failing program like BDS some sense of progress.

    Thanks for the data!


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