Read the rest here......Falling behind by nearly a full percentage point has a huge impact on giant endowments like Harvard’s, which stood at $35.7 billion at the end of the fiscal year. Harvard said its investments declined by 2 percent, and its endowment total dropped by $2 billion because of the investment losses and spending. Harvard is now shaking up its endowment management.
Yale did much better than many of its peers, gaining 3.4 percent. But that still lagged the 4 percent return over the same period for the Standard & Poor’s 500-stock index and wasn’t enough to offset spending. Yale’s total endowment dropped by $200 million, to $25.4 billion.
Compare the results with those of Houghton College, a liberal arts institution affiliated with the Wesleyan Church in the Genesee Valley in western New York. Houghton has just over a thousand students and an endowment of $46.4 million.
Houghton emerged in the top quartile of all endowments, according to Nacubo, with a return of 11.85 percent for the year ended Sept. 30. (Houghton uses a different fiscal year.) For the calendar year, the results were also impressive, at 7.54 percent. Houghton has been able to lower its spending rate — the amount it withdraws each year to fund operations — to an enviable 4.5 percent, and may be able to lower it further, to 4 percent.
How did tiny Houghton do it?
The answer is pretty simple: Houghton got out of hedge funds and all alternative investments a year and a half ago, and moved the entire portfolio to a mix of low-cost index funds and mutual funds at the fund giant Vanguard.
https://www.nytimes.com/2017/02/09/busi ... .html?_r=0