Yale’s endowment posts 11.5 pct returns

Yale said in a release it plans to spend $1.2 billion from the endowment during the current academic year, which represents about one-third of the Ivy League university’s operating budget.

Sept 24 Yale University’s investment return was 11.5 percent for the year ended June 30, valuing its endowment at $25.6 billion, according to a report on the university newsletter.

While still significantly smaller than Harvard’s $37.6 billion fund, the largest among universities, Yale has performed dramatically better than Harvard over a decade, with a 10 percent annualized return, vs. Harvard’s 7.6 percent.

MIT was the sixth richest university in the USA in endowment terms at the start of the 2014/15 period, and the increase brings its total assets to $13.5bn.

According to the Yale Investments Office release, over the past decade, the endowment has grown from $15.2 billion to $25.6 billion.

Yale’s investment returns for 2015 bested many of its peer institutions, including the two universities with assets greater than Yale’s. The 11.5 percent return also outpaced the preliminary 5.6 percent average return for endowments over $3 billion, which was reported by Cambridge Associates, a leading investment advisor to foundations and endowments.

Yale’s 10-year asset class performance remains strong.

Spending on endowment, which is the largest source of revenue for the university, is projected to be $1.2 billion for fiscal 2016, YaleNews reported. Foreign equities produced returns of 17.4%, surpassing the composite benchmark by 8.4% annually.

According to Putnam Investments” website, “Absolute return strategies, by definition, pursue returns independent of a traditional benchmark index like the S&P 500 Index or the Barclays U.S. Aggregate Bond Index. Real estate and natural resources contributed annual returns of 6.2% and 10.5%, respectively. It outperformed “broad market results for domestic stocks, which returned 8.2 percent annually, and for domestic bonds, which returned 4.4 percent annually”, according to its release. Almost a fifth is dedicated to scholarships, fellowships and prizes. “The remaining endowment funds are donor-designated to support specific departments or programs”.