Dartmouth’s endowment investments generated a loss of 1.9 percent for the fiscal year that ended June 30, 2016. The endowment ended the fiscal year valued at $4.5 billion.
Markets this past fiscal year were marked by concerns about global growth as well as uncertainty about the path out of an unprecedentedly low interest rate environment. The period from July 1, 2015, to June 30, 2016, saw negative returns in almost all major international markets. Within the U.S., the energy and healthcare sectors were also in negative territory. Defensive U.S. equities, real estate, and bonds represented the few bright spots in the market.
“The endowment was not immune from turbulent global markets, but despite overall weak absolute results, we did see impressive relative returns from some managers who were able to capitalize on opportunities resulting from the volatility—which is why we remain committed to having a globally diversified and actively managed portfolio,” says Chief Investment Officer Pamela L. Peedin ’89, Tuck ’98.
For the three-, five-, and 10-year periods ending June 30, 2016, Dartmouth’s endowment has generated average annualized returns of 8.7 percent, 8.8 percent, and 7.2 percent, respectively, outperforming the MSCI All Country World Index and a general 60 percent global equity/40 percent bond benchmark return.
Over 20 years, Dartmouth’s endowment has earned an average annualized return of 10.3 percent, delivering inflation-adjusted returns that meet or exceed the distribution to operations and preserve the purchasing power of the endowment. These long-term returns place Dartmouth’s endowment in the top ranks among college and university peers.
“We remain disciplined and focused on managing the endowment to deliver exceptional long-term results. We position the portfolio and the institution to be prepared for investment volatility in the short term to ensure that we are maximizing our opportunity for exceptional long-term risk-adjusted results,” says Trustee Richard Kimball ’78, chair of the board of trustees’ investment committee.
As of June 30, 2016, the endowment value of $4.5 billion reflected a decrease of $190 million over the previous end-of-year value. The decrease reflected net investment losses of $100 million and distributions of $209 million to support Dartmouth programs, offset by new gifts and transfers of $119 million.
“Dartmouth’s endowment continues to be a critical part of our foundation in pursuing excellence. This year’s distribution, representing over 20 percent of the operating budget, supported our commitment to need-blind financial aid as well as key strategic priorities in education, innovation and research. The endowment model and the generous support from alumni help advance Dartmouth as a global leader and distinctive research center,” says President Phil Hanlon ’77.
