Posted on: Sunday, August 10, 2003

Fed chiefs aren't flashy investors

By Russ Wiles
Arizona Republic

They are seven of the most economically powerful Americans. But as investors, Alan Greenspan and his fellow Federal Reserve governors are pretty unremarkable, favoring mainstream vehicles such as mutual funds despite their impressive wealth.

Most of the seven are millionaires, though it's hard to say precisely how wealthy they are. The disclosure forms that Fed governors must complete for themselves and their spouses ask for asset ranges, not specific numbers. Nor are home values included.

On the basis of conservative asset estimates from research group Financial Markets Center, five of the seven governors have more than $1 million in financial wealth; Donald Kohn and Mark Olson are the exceptions.

Using more aggressive estimates, all but Kohn counted at least $1 million.

Regardless of the scale, Susan Bies is the wealthiest Fed governor, with financial assets between $6.6 million and $16.8 million. Greenspan placed second, with assets between $3.7 million and $8.2 million.

Despite the wide dollar estimates, the report provides an interesting glimpse at how the nation's top central bankers manage their own money. Notably absent are hedge funds, private money-management accounts and other upscale services. The Fed governors clearly favor mutual funds and other mainstream vehicles.

"My sense is that they try to be as plain-vanilla as possible," said Tom Schlesinger, executive director at the Financial Markets Center.

Chairman Greenspan is the most boring investor, holding 96 percent of his reported wealth in Treasury bills with no common stocks. But his wife, NBC reporter Andrea Mitchell, holds 11 stocks and four Dreyfus mutual funds.

Her holdings include shares in Abbott Laboratories, H.J. Heinz and Kimberly Clark.

Incidentally, being married to Greenspan seems to have helped Mitchell on the lecture circuit. She reported $187,000 in speaking fees last year, up from $103,500 in 2001.

Vice Chairman Roger Ferguson has a diverse portfolio that is spread among stock and fixed-income holdings. He and his wife own more than 30 mutual fund accounts, largely from Vanguard and Smith Barney. Ferguson listed Vanguard 500 Index as his top fund holding.

Ferguson and his wife also have stakes in several insurance products, including variable annuities.