University of Pennsylvania's $21 billion endowment posted a return of 1.3% for the fiscal year ended June 30.
The Philadelphia-based university's endowment return fell short of its composite benchmark return of 2.2% for the period, according to an endowment performance report on its website.
For the three, five and 10 years ended June 30, the endowment returned an annualized 12.7%, 9.5% and 9.7%, respectively, above the respective benchmarks of 8.4%, 8.1% and 7.7%.
The endowment had returned 0.0% for the fiscal year ended June 30, 2022.
While the endowment's return for the most recent fiscal year exceeded that of the prior fiscal year, it fell short of the median return of 3.8% for the 17 endowments whose latest fiscal-year returns have been tracked by Pensions & Investments as of Oct. 11.
While the report did not specify the reason for the relative weakness of its latest fiscal-year return, it is likely the university's limited allocation to public markets and outsize allocation to alternative investments in the Associates Investments Fund, which holds the vast majority of Penn's endowment assets, was a benefit.
For the year ended June 30, the Russell 3000 and Bloomberg U.S. Aggregate Bond index returned 19% and -0.2%, respectively, well above their respective returns of -13.9% and -10.3% for the year ended June 30, 2022.
The university's new annual report includes an actual allocation of Penn's $23.1 billion in investments, which includes the Associated Investments Fund as of June 30.
The actual allocation was 34% private equity, 18.5% absolute return, 11.3% real assets, 9.9% domestic equities, 7.3% international equities, 6.4% U.S. Treasuries, 6.1% emerging markets equities, 4.2% short-term investments, 1.9% split-interest agreements and the rest in corporate bonds, derivative instruments and other.
The report did not specify whether the returns were gross or net of fees, nor were returns by asset class provided.
