Yale posted 5.7 percent returns on its endowment in the fiscal year 2018-19 –– a figure that falls slightly below last year’s above-average returns.
According to a Friday press release, the University’s endowment reached a total of $30.3 billion on June 30, the end of the most recent fiscal year. Although some Ivy League institutions have yet to announce returns on their endowment for this fiscal year, Yale lagged behind its peers among the five that have.
Still, Charles Skorina, a longtime endowments tracker whose firm recruits institutional investment executives, told the News that more focus should be on long-term trend lines. The year-to-year gains are estimates that “don’t mean much,” he added.
“When it comes to Yale, you need to look at their average over a five-year period at least,” he said.
Over the past 20 years, Yale’s endowment returned a yearly average of 11.4 percent, the release stated, which Skorina called “stellar.” This figure is almost double the estimated 6.5 percent average return for college and university endowments nationwide, adding $28.6 billion of value relative to the average.
The endowments of Harvard University and the University of Pennsylvania each grew 6.5 percent this year, and Dartmouth College’s grew 7.5 percent. Brown University –– with the smallest endowment fund in the Ivy League –– saw the group’s highest returns so far, 12.4 percent. All five schools experienced figures below their respective returns of last year, at the end of which Yale reported 12.3 percent.
Figures released by colleges across the country show what analysts at Barron’s called a disappointing year for endowments as a whole.
Yale keeps a “well-diversified, equity-oriented portfolio,” the release stated, with 21.5 percent allocated to venture capital, 10 percent to real estate and 2.75 percent in domestic equity.
In January, Vice President for Finance Stephen Murphy ’87 told the News that Yale’s finances are in good shape, which has allowed the University to invest in its resources in new projects.
“The University is in good shape from a financial standpoint, and we have a lot of great investments that we are making as a result — the construction of the new science building, the renovation of the Hall of Graduate Studies, the opening of the two new residential colleges, as well as the expansion of financial aid,” Murphy said. “All these things are made possible by the University’s strong financial position.”
For Yale’s 2019-20 fiscal year, the University plans to spend roughly $1.4 billion — over a third of its net revenues — from the endowment on operational costs, the release states. This money goes to faculty salaries, student scholarships and specific programs, among other expenses, and is Yale’s largest source of income.
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