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U.S. public-university endowments, including the country’s second-wealthiest at the University of Texas, are reporting fiscal 2015 returns that fail to meet the annual industry standard
Bloombergs' Lauren Streib and Michael McDonald

September, 2015

 

U.S. public-university endowments, including the country’s second-wealthiest at the University of Texas, are reporting fiscal 2015 returns that fail to meet the annual industry standard.

University of Texas Investment Management Co., with $26.6 billion in endowment assets, said it had a 3.3-percent return for the year ending June 30, according to a statement posted on its website. The Austin-based company invests funds for Texas A&M University and the University of Texas.  

Ohio State University, University of Florida Investment Co. and Indiana University Foundation all have reported this month that returns for the period were less than 5 percent. Endowments aim to achieve about a 7.5-percent return to protect against inflation and provide for university support expenses.

“Although most endowments and foundations benefited from double-digit returns in 2014, the outlook for future returns is more muted,” Monica Issar, global head of JPMorgan Chase & Co.’s endowment and foundation group, said in a research paper published this month. Funds will have to move away from passive investing strategies, she said.

The median return for large endowments and foundations this year is 3.6 percent, according to Wilshire Trust Universe Comparison Service. Weak U.S. equity and bond markets plagued investors. For the year ending June 30, a benchmark 60/40 portfolio of the MSCI World Index and Barclays Global Aggregate Index returned 1.6 percent.


Read more at http://www.bloomberg.com/news/articles/2015-08-31/u-s-university-endowment-returns-fall-with-equity-bond-markets 

 


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