Endowments Return 5.3% in 2019

The National Association of College and University Business Officers published their data a couple of weeks ago.

Data gathered from 774 U.S. colleges, universities, and affiliated foundations for the 2019 NACUBO-TIAA Study of Endowments® (NTSE) show that participating institutions’ endowments returned an average of 5.3 percent (net of fees) for the 2019 fiscal year (July 1, 2018 – June 30, 2019).

Despite posting a lower return than FY18’s one-year average of 8.2 percent, the average 10-year endowment return reached 8.4 percent, surpassing institutions’ long-term average return objective of 7 percent for the first time in a decade. This reflects the strong stock market recovery since the 2008 financial crisis as well as solid management practices.

U.S. Educational Endowments Report 5.3 Percent Average Return in FY19, NACUBO

You can find the data here.

2019 NACUBO-TIAA STUDY OF ENDOWMENTS (NTSE) RESULTS

It’s good to remember what Charles D. Ellis wrote about endowments in David Swensen’s book Pioneering Portfolio Management.

Most of the Western world’s great educational and cultural institutions – universities, colleges, libraries, museums, and foundations – depend, to varying degrees, on their endowments and the spendable funds they produce. Usually the difference between “mediocre” and “excellent” is that margin of assured fiscal strength that only an endowment can produce. In this way, our society depends on endowments for that vital margin of fiscal strength that facilitates institutional excellence.

You can also read more about the endowment study here.

Inevitably, a Small College Will Outperform Harvard. There’s More to That Story., Institutional Investor

Endowment Returns Solid in 2019, Inside Higher Ed

Endowment returns drop in 2019 but gain over decade, Pensions&Investments

College endowment spending up 10% in 2019, Education Dive

How University Endowments Missed the U.S. Stock Market Rally, Barron’s

Survey: University Investments Saw Slower Growth in 2019, The New York Times

Yale’s endowment growth larger than peers’, Yale Daily News

The front doors of Sterling Memorial Library at Yale.
Twitter @Yale

Post by Marcelino Pantoja