Educational Endowments Report -1.9 Percent Return for FY2016 as 10-Year Return Falls to 5.0 Percent. Institutions Increase Endowment Spending Despite Lower Returns.
NEW YORK, NY, January 31, 2017 – Data gathered from 805 U.S. colleges and universities for the 2016 NACUBO-Commonfund Study of Endowments® (NCSE) show that participating institutions’ endowments returned an average of -1.9 percent (net of fees) for the 2016 fiscal year (July 1, 2015 – June 30, 2016).
This year’s negative return, following the low 2.4 percent return reported for FY2015, contributed to a decline in long-term 10-year average annual returns to 5.0 percent from last year’s 6.3 percent. As in fiscal 2015, this year’s long-term return figure is well below the median 7.4 percent that most institutions report they need to earn in order to maintain their endowments’ purchasing power after spending, inflation, and investment management costs.