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Educational endowments earned investment returns averaging -0.3% in FY2012, down sharply from 19.2% in FY2011

Friday, February 08, 2013

Bailey McCann, Opalesque New York: Educational endowments took a hit to their returns over 2012. Data gathered from 831 U.S. colleges and universities for the 2012 NACUBO-Commonfund Study of Endowments® (NCSE) show that these institutions’ endowments returned an average of -0.3%(net of fees) for the 2012 fiscal year (July 1, 2011 – June 30, 2012)—a steep decline from the FY2011 average return of 19.2%. However, over the longer term, ten-year returns for FY2012 were 6.2% compared with 5.6% in FY2011, suggesting that long-term performance for many institutions continues to improve.

The data are broken down into six categories according to size of endowment, ranging from institutions with endowment assets under $25m to those with assets in excess of $1bn. These large endowments produced the highest FY2012 return, an average of 0.8%. The other categories with positive returns were endowments with assets between $501m and $1bn, which reported an average return of 0.4%, and endowments with assets under $25m, which reported an average return of 0.3%. All three of the mid-sized cohorts reported negative returns, the lowest being-1.0 percent among institutions with assets between $51 and $100m. Institutions with assets between $101 and $500m returned -0.7%, while those with assets between $25 and $50m returned -0.5%.

This year’s data show that institutions’ trailing three-year returns averaged 10.2%; ......................

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