Academic Endowments Post Sluggish Returns for Fiscal 2023

Yale, Stanford, Bowdoin and Duke's funds trail previous showings amid a rough year.



The trend of low returns for academic endowments continues amid a turbulent time for investments, with uninspiring reports for the 2023 fiscal year that ended in June released recently by Yale, Bowdoin, Duke and Stanford.

The Yale Investment Office, manager of the university’s $40.7 billion endowment, returned 1.8% in the period, representing a gain of $759 million, according to a news release. That fell below the 10.9% average return over the past 10 years. The value of the university endowment decreased in fiscal 2023, to $40.7 billion from $41.4 billion, after operational spending and donations. 

Yale only issued the press release, rather than a full endowment report, for the second consecutive year, thus not revealing its allocation. Yale has been known as a pioneer in investing in alternatives under legendary CIO David Swenson, who passed away in May 2021.

Bowdoin College also reported its low-end endowment returns this week, a meager 0.6%. The flat performance was attributed to current economic headwinds.

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“It has been a difficult period for investors—including for Bowdoin—with the multiple headwinds of surging inflation, higher interest rates, a land war in Europe, and a technology market unwind,” Bowdoin President Safa Zaki said in the news release. “Against this challenging backdrop, our investment team, led by Niles Bryant, and our Investment Committee, have done an excellent job of protecting the value of the Bowdoin endowment and preserving much of the extraordinary gains recorded in fiscal 2021.” 

The endowment of the Brunswick, Maine-based school, valued at $2.4 billion at the end of the fiscal year, has historically enjoyed double-digit results, with three-, five- and 10-year returns of 13.7%, 11.5% and 11.7%, respectively.

Duke University‘s 2023 endowment results were in the red: DUMAC Inc., the school’s investment management company, reported a loss of 1%, far below its goal of an annual real return rate of 5%. The fiscal 2023 performance fell way beneath its long-term record, 9.8% annually over 10 years. For the 2023 fiscal year, the endowment dipped to $11.6 billion, off its 2021 peak of $12.7 billion.

Stanford University’s endowment returns were the best of the four, although down from its historical record. The endowment returned 4.4% in its merged pool for the June-ending period. Stanford’s five- and 10-year returns were 9.5% and 9.4%, respectively. The value of the endowment was $40.9 billion at the end of the fiscal year.

According to Stanford, its rocky investments in venture capital offset strong gains in other asset classes.

“Strong results in most asset classes during the past year were partially offset by losses in our venture capital and growth equity portfolios, continuing a correction that began in 2022,” said Robert Wallace, CEO of Stanford Management Co. “Viewed over multiple years, our disciplined and diversified investment approach has delivered attractive returns with moderate volatility.” 

As universities begin to report their fiscal year 2023 endowment results, there is a common theme across the board: Endowment returns are sluggish, compared with the overall markets. The low-single-digit and even negative results of these four schools stand in marked contrast to the MSCI All Country World Index, which returned 14% over the academic fiscal 2023 period.

Related stories:

MIT Endowment Return Dips 2.9% in Fiscal 2023 

University of Virginia Endowment Return Misses Benchmark by 10.3 Percentage Points 

Endowments, Foundations Increase OCIO Use, but Underutilize Alts

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