Independent school endowments returned an average net 25.8% for the fiscal year ended June 30, according to an annual study from Commonfund Institute and the National Business Officers Association.
The study, which compiled return results for fiscal year 2021 from private, non-profit institutions enrolling students from kindergarten through 12th grade, showed a significant increase from the prior fiscal-year's average net return of 2.8%. It was also the highest return recorded since the Commonfund Institute began the study in fiscal year 2005.
For the three, five and 10 years ended June 30, the average annualized net returns were 11.1%, 10.4% and 8.2%, respectively.
School endowments with more than $50 million in assets reported an average net return of 29.3% for the fiscal year ended June 30 (up from 2.7% the previous fiscal year), while those with $10 million to $50 million in assets reported a net return of 25.3% (up from 2.4%). Endowments with less than $10 million returned an average net 21.2% (up from 3.3%).
The average asset allocation as of June 30 was 34% domestic equities, 29% alternative strategies, 21% international equities, 13% fixed income and 3% short-term securities/cash/other.
Also, the study showed that 10% of respondents reported they were seeking to include ESG investments, up from 4% the prior fiscal year.
For this latest study, Commonfund Institute gathered data from 215 independent schools with $13.8 billion in combined endowment assets. Fiscal-year 2020 data came from 200 schools with $9.8 billion in combined assets.