U.S. and Canadian endowments are struggling after producing the worst average annual return since the financial crisis low point resulting in an aggregate asset drop of 2.6%.
The 2016 NACUBO-Commonfund Study of Endowments tells a tale of woe for more than three-quarters of the 805 institutions that provided asset and performance data as of June 30, the end of the fiscal year for most colleges and universities.
Endowment assets totaled $515 billion as of June 30, the data showed. The 2.6% decline in aggregate endowment assets is well below the 2.5% increase in assets in fiscal year 2015 and the 15% growth in fiscal year 2014.
The average one-year return for the study's universe was -1.9% net of fees, the worst since the average -18.7% for the year ended June 30, 2009.
Endowments and foundations had positive average annual returns in all but one of the first six fiscal years of this decade: 2.4% in 2015; 15.5% in 2014; 11.7% in 2013; -0.3% in 2012; 19.2% in 2011; and 11.9% for 2010.
“This year's results are cause for concern. Continued below-average investment returns will undoubtedly make it much more difficult for colleges and universities to support their missions in the future,” said John D. Walda, president and CEO of the National Association of College and University Business Officers, Washington, in a joint news release with Commonfund Institute, Wilton, Conn.
The average one-year return as of June 30 for the 770 endowments that participated in both the 2016 and 2015 surveys was -2% net of fees vs. 2.4% as of the same date in 2015.