Independent school endowments returned an average net 2.8% for the fiscal year ended June 30, according to an annual study from Commonfund Institute.
The study, which compiled return results for fiscal year 2020 from private, non-profit institutions enrolling students from kindergarten through 12th grade, showed a significant decline from the prior two fiscal years' average net returns of 5.7% and 7.4%, respectively.
For the three, five and 10 years ended June 30, the average annualized net returns were 5.8%, 5.5% and 7.7%, respectively.
School endowments with more than $50 million in assets reported an average net return of 2.7% for the fiscal year ended June 30 (down from 5.1% the previous fiscal year), while those with $10 million to $50 million in assets reported a net return of 2.4% (down from 5.7%). Endowments with less than $10 million returned an average net 3.3% (down from 6.6%).
The average asset allocation as of June 30 was 31% domestic equities; 19% international equities; 17% marketable alternatives (which includes hedge funds and similar funds); 15% fixed income; 6% private equity; 5% short-term securities/cash/other; 3% venture capital; and 1% each energy/natural resources, private real estate, commodities/managed futures and distressed debt.