Duke Endowment Returns 12.7%, Hits All-Time High

Endowment value climbs to record $7.9 billion.

Duke University’s long-term pool, the primary investment vehicle for its endowment assets, earned a 12.7% investment return for the fiscal year ending June 30, pushing the endowment’s value to an all-time high of $7.9 billion.

The 2017 results outperformed the fund’s returns from last year, a 2.6% loss for the year ending on June 30, 2016.  During that time, the MSCI All Country World Index was down 3.7%, and the Barclays Capital Aggregate Index gained 6%. However, this year’s returns were just short of the broad universe of US colleges and universities, which generated a median 12.9 % during the same period, according to Cambridge Associates. 

Further details of the fund’s performance have yet to be disclosed.

The university’s investment company, Duke University Management Company’s (DUMAC) goal is for the long-term pool to earn an annualized real rate of return of at least 5.0% net of fees to fund the university’s spending, and to allow for growth of the endowment after factoring in inflation. Over the past 10 years, the average annual return on the long-term pool has been 6%.

One of the fund’s long-term benchmark is a composite of 70% MCSI All Country World Index and 30% Barclays Capital Aggregate Index. The MCSI index represents the broad global equity market, and the Barclays index represents the domestic bond market. The firm said it chose the mix between equity and bonds because a 70% exposure to equity investments historically has achieved the university’s 5.0% real annual return objective over the long term.

The endowment’s main peer benchmark is the Cambridge Associates Universe. DUMAC seeks to achieve performance over successive rolling three-, five-, and 10-year periods in excess of the median return for the benchmark.


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