According to the Investor Responsibility Research Center (IRRC) in Washington, 42 companies pulled out of South Africa in 1985 - more than half of them in the year's last half, when widespread racial unrest in South Africa gave new energy to activists urging that American institutions and individuals divest themselves of economic ties to that nation.
At least four more corporations have pulled out of South Africa this year, the center reported. And several more - such as AT&T - have announced plans to pull out or have reported that they are considering such a move.
By contrast, only seven corporations severed ties to South Africa in all of 1984.
But this trend by no means signals a conclusive victory for those who see corporate divestiture as a way to force South Africa's white-minority government to abandon the practice of apartheid.
Consider the following currents and cross-currents:
* Although many companies are pulling out of South Africa, the list of corporations targeted by divestiture advocates remains lengthy because of elastic definitions of what constitutes an investment in South Africa and
because of corporate merger activity that gives companies new operations in that country.
* Investment portfolios that are free of the stocks traditionally linked to South Africa are outpacing the broader stock market - but so are the stocks of of the companies still operating in the troubled nation, according to several investment advisers.
* Some large public pension funds are finding it difficult to manage their
funds in compliance with increasingly stringent anti-apartheid mandates, which sharply limit the number of untainted shares available for them to buy.
* And the movement away from the stocks of companies with South African business continues to be limited almost completely to public and nonprofit pension funds and endowments, as corporate pension funds worry about possible conflicts between divestiture and federal standards for the prudent management of workers' retirement savings.
The Investor Responsibility Research Center, in a book due out next month, has assembled a roll call of the companies that have marched out of South Africa. Their records showed that 270 companies had direct investments in South Africa at the end of 1985, compared with 284 at the end of 1984.
But Alison Cooper, an IRRC research analyst, explained that those figures reflect net changes, with the recent departures offset by the addition of companies missed in earlier IRRC screenings.
"We've taken a sharper look at companies that have indirect investments, and we've uncovered companies that we did not know about in 1984," Cooper said.
Steve Leuthold of the Leuthold Group, an investment-strategy firm in Minneapolis, also sees a movement toward corporate withdrawals from South Africa.
"Things have abated somewhat lately, now that South Africa isn't on the front pages," Leuthold said. "But clearly the campaign has been successful, in that you have seen a number of U.S. companies that have gotten out of South Africa."
He told of a friend of his, in business in London, "who has been approached by about 15 U.S. companies about selling all of their South African divisions."
Richard A. Crowell, senior vice president of the Boston Co. investment managers, also tracks issues related to South Africa and agrees that the campaign has begun to bear fruit.
"I do get a sense that corporations are pulling out," Crowell said Friday. "I think the reasons are a combination of moral suasion, dissatisfaction with the economic opportunities in the country and just the general human distaste for what is going on there."
But these clear signs of success have not eliminated the very cloudy questions that still surround the divestiture issue - beginning with the basic question of who does invest in South Africa and who does not.
The IRRC's roster of non-South Africa companies is widely used in
investments - but it is not universally accepted. Some divestiture laws - including the one that governs public pension funds in New Jersey - contain language that substantially reduces the number of companies approved for investment.
NO LONGER 'CLEAN'
And mergers or acquisitions can turn a "clean" stock into a "tainted" one almost overnight, said Roland Machold, New Jersey state director of
"For example, we will shortly add Procter & Gamble (to the disapproved list) because of their purchase of Richardson Vicks," Machold said. "And AT& T announced with some fanfare that they were going to get out of South Africa - but if you read through it, it may very well be that, notwithstanding what AT&T believes, they still would not be approved under New Jersey law."
Unlike AT&T, most of the companies that have pulled out of South Africa were reluctant to publicly link their action to the national divestiture campaign, according to Cooper of the IRRC.
Those that did explain tended to cite the worsening economic climate in South Africa, rather than any moral imperative involving apartheid, she added.
Some simply cited "the hassle factor" of South African investments.
"One guy told me that his board was spending 10 percent of its time on the issue when they got less than 1 percent of their profits from there," one investment adviser said.
One reason the corporate debate had been so heated in the past was that investment advisers and pension-fund managers were not sure how divestiture would affect the stock market in general and pension-fund holdings in particular.
And they still are not sure.
When South Africa's racial violence was dominating news reports here last summer, investment experts Crowell and Leuthold both looked at the links between the divestiture campaign and the stock market.
Leuthold warned at the time that the stocks of the "tainted" companies - what he calls the "South Africa hit list" - could be depressed by the sales pressure from pension funds and other large institutional divestors.
His hit list included most of the largest industrial corporations in America, including IBM, Exxon, Du Pont, Mobil, General Motors and SmithKline Beckman. If their stock were damaged, Leuthold said, the entire market could be depressed.
Crowell responded to the interest in divestiture by assembling a model ''South Africa-free" portfolio - that he predicted could perform just as well as portfolios that included the "tainted" stocks.
Based on early April's stock values - and on a highly disciplined investment approach - Crowell has been right.
His model non-South Africa portfolios "are performing better than our portfolios which include everything - which, in turn, are performing better than the Standard & Poor's 500," he said.
From Jan. 1 to April 4, Crowell said, the S&P 500 was up 9.2 percent, the universal Boston Co. portfolio was up 10.1 percent, and his non-South Africa portfolio was up 13.8 percent.
THE FLIP SIDE
But Leuthold also has been busy tracking the flip side of the argument - the effect of divestiture on the target stocks. And, to his surprise, he has found that his hit list of about 60 major stocks also has been outperforming the S&P 500 since the first of the year.
The same stocks lagged a bit behind the S&P 500 over the last 12 months, he added, "but it wasn't statistically significant. We haven't seen the degree of under-performance that we expected."
But stock values are just part of the picture, according to those who face the practical problems of turning a public mandate into a real-life, profitable portfolio that is "untainted" by South African investment.
"We have to reinvent the wheel," Machold said of his staff's efforts to assemble a list of stocks and bonds in which they can legally invest the $16 billion worth of retirement savings they manage for New Jersey public employees.
Unable by law to rely on the IRRC's list, Machold's staff will mail out a questionnaire on South African investment practices to several hundred corporations later this month.
Any corporation that does not respond to the notice in 30 days "will be assumed to be South Africa-related," Machold said. Thus, the result of that survey could dramatically reduce Machold's investment options.
Pension-fund managers would never dream of putting all their nest eggs in one basket; for them, less portfolio diversity means more portfolio risk.
Therefore, some public pension funds have tried to balance their increased risks by curtailing the percentage of the total fund that can be invested in stocks.
For example, the Washington pension-fund board voted to reduce its permissible ratio of stock investments from 70 percent of the fund to 40 percent - to compensate for the increased volatility of a non-South Africa portfolio. New Jersey also lowered its ceiling on stock investments.
As a result, the pension funds may have missed out on earnings they could have reaped if they had been more fully invested in the current booming stock market, according to Machold, who recently did a report on Washington's experience.
Not everyone agrees that this risk-balancing strategy is required for prudent divestiture of public pension funds.
But then, no one is quite sure whether prudence and divestiture can even co-exist under the federal regulations that govern the private pension funds set up by U.S. corporations.
According to several sources, there is increasing legal concern about whether corporate pension funds would pass muster under the standards of prudent management set by federal pension laws if they limited their investment choices as sharply as some public pension funds have.
"There haven't been any cases to test it yet," one fund manager said. ''But there are some straws in the wind that there may be a prudency issue here - quite simply, we're worried about being sued."
Because of this uncertainty, the divestiture drive up to now has been limited largely to smaller public pension funds, with New Jersey's by far the largest fund affected. Over the next few years, however, several other major public retirement plans are expected to start divesting their South Africa- linked holdings.
And when more pension-fund money starts chasing after a limited universe of "legal" investments, the problems and risks facing today's pension-fund managers could escalate sharply - unless the corporate exodus out of South Africa grows enough to start expanding the managers' investment options.
"That's the problem with all this," sighed Machold of New Jersey, after reflecting on his funds' experience with divestiture so far. "There is simply no single bottom line."