The fund’s value increased 2.5% to $16.7 billion in the year ended June 30, including investment gains of $1.4 billion, $136 million in gifts from donors and $1.1 billion in distributions to the university, according to a letter posted Friday on Yale’s website.
Yale generated an annualized return of 8.9% in the 10 years through June 30, compared with Harvard’s 7% annualized increase and the 3.4% median gain by public and corporate pension plans, endowments and foundations tracked by Wilshire Associates.
Yale’s real estate, oil and gas, and timber holdings, which make up a combined 28% of its asset allocation, lost 4.5% in the past year.
“While real assets provide protection against inflation, which may prove beneficial in today’s highly uncertain global economy, in weak economic environments real assets tend to produce poor returns,” the university said in the statement.
Private equity holdings, Yale’s biggest asset class at 33% of the fund, returned 18% for the year. Yale’s absolute-return stakes, the endowment’s third-biggest group of holdings at 19%, rose 12%. The university’s U.S. and foreign stocks beat benchmarks, gaining 21% and 15%, respectively.
Harvard’s $27.4 billion fund gained 11% last year. The University of Pennsylvania in Philadelphia said Friday its $5.7 billion fund gained 13%, while Columbia University’s $6.5 billion endowment in New York gained 17%. The S&P 500 rose 12% in the year ended June 30, and fell an average of 1.6% a year in the past decade.