U.S. college and university endowments shrank in fiscal 2012, according to a new study.
The 2012 NACUBO-Commonfund Study of Endowments reported that institutional endowments returned an average -0.3% (net of fees) in the year ending June 30, down from an average return of 19.2% in FY2011.
Ten-year returns for the year were 6.2%, compared with 5.6% a year earlier. This suggested that long-term performance continued to improve for many institutions, the report said.
The 2012 NCSE report analyzed data from 525 private and 306 public institutions, representing some $406 billion in total endowment assets. Ninety-four percent of participants also took part in the previous year’s study.
The report broke down data into six categories according to size of endowment. The largest endowments with assets of more than $1 billion produced the highest return, an average of 0.8%.
Endowments with assets between $501 million and $1 billion and the smallest ones, with assets under $25 million, also reported positive returns, 0.4% and 0.3%, respectively. All three of the midsize cohorts reported negative returns.
The fiscal 2012 data showed that institutions’ trailing three-year returns averaged 10.2%, trailing five-year returns averaged 1.1% and trailing 10-year returns averaged 6.2% (all net of fees). Endowments with assets exceeding $1 billion generated the highest average return for all periods.