Endowment Index Returns Over 5% in Q3

China equities, timber, and private agriculture investments bolster robust quarterly gains.

The portfolio for Nasdaq OMX’s Endowment Index increased a robust 5.05% during the third quarter that ended Sept. 30; however, this was below the return of a portfolio comprised of 60% stocks and 40% bonds, which increased 5.89% during the quarter.

The index’s gains were spurred by surging equity markets, which saw strong gains during the quarter, as represented by the S&P 500 Index, which climbed 8.9% during the period. Developed and emerging market equities were up 9.77% and 8.04%, respectively, for the quarter.

The index has had a roller coaster year after falling more than 20% during the first quarter when the pandemic hit the US, followed by a 15.4% rebound during the second quarter.

Among the index’s 24 components, 21 earned positive gains during the quarter, two components reported double-digits losses, and one was flat. The top performing asset classes were emerging market equity–China and timber commodities, which climbed 15.57% and 14.57%, respectively. They were followed by private agriculture commodities, diversified futures commodities, and metals/mining, which rose 12.13%, 11.59%, and 9.95%, respectively.

Oil and gas and publicly traded master limited partnerships (MLPs) were the two decliners, tumbling 20.35% and 16.65%, respectively, while Treasury bills were unchanged during the quarter.

The Endowment Index is based on the portfolio allocations of over 770 educational institutions managing more than $630 billion in total assets as of June 30, 2019. The 24 sub-indexes that make up the index are investable and include more than 44,000 underlying securities.

The index’s current target allocation is 53.2% in alternatives, which includes private equity, hedge funds, and real assets; 35.2% in equities; 8% in fixed income; and 2.6% in liquidity.

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