Investment return of 11.5% brings Yale endowment value to $25.6 billion

New Haven, Conn.—Yale’s endowment earned an 11.5% investment return (net of all fees) for the year ending June 30, 2015. The endowment value grew from $23.9 billion on June 30, 2014, to $25.6 billion on June 30, 2015, net of spending that supports faculty salaries, student scholarships, and other expenses. The University benefited from investment gains of approximately $2.6 billion.

Spending from the endowment, which is the largest source of revenue for the University, for Yale’s 2016 fiscal year is projected to be $1.2 billion, representing approximately 34% of the University’s net revenues. Endowment distributions to the operating budget have nearly doubled in the last decade, with an annualized increase in endowment spending of 6.4%. Those distributions support, among other priorities, Yale’s commitment to meeting full financial need of every student enrolled in Yale College.

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The University’s longer term results remain in the top tier of institutional investors. Yale’s endowment returned 10.0% per annum over the 10 years ending June 30, 2015, surpassing broad market results for domestic stocks, which returned 8.2% annually, and for domestic bonds, which returned 4.4% annually. Relative to the estimated 6.6% average return of college and university endowments, over the past decade Yale’s investment performance added $8.5 billion of value in the form of increased spending and enhanced endowment value. During the 10-year period, the endowment grew from $15.2 billion to $25.6 billion, net of spending.

Over the past two decades, Yale’s endowment generated returns of 13.7% per annum. Compared to the estimated 8.5% average return of college and university endowments, Yale’s investment performance added $23.4 billion of incremental value. During the 20-year period, the endowment grew from $4.0 billion to $25.6 billion, net of spending.

Long-Term Asset Class Performance 
Yale’s 10-year asset class performance remains strong. Domestic equities returned 12.3%, besting the benchmark by 4.1% annually. Foreign equities produced returns of 17.4%, surpassing the composite benchmark by 8.4% annually. Absolute return produced an annualized return of 7.2%. Leveraged buyouts returned 13.4%, while venture capital returned 18.0%. Real estate and natural resources contributed annual returns of 6.2% and 10.5%, respectively.

Asset Allocation 
Yale continues to maintain a well-diversified, equity-oriented portfolio, with the following asset allocation targets for fiscal 2016:

  • Absolute Return: 21.5%
  • Leveraged Buyouts: 16.0%
  • Foreign Equity: 14.5%
  • Venture Capital: 14.0%
  • Real Estate: 13.0%
  • Natural Resources: 8.5%
  • Bonds and Cash: 8.5%
  • Domestic Equity: 4.0%

Yale’s spending and investment policies provide substantial support to the operating budget for current scholars, while preserving endowment purchasing power for future generations. Approximately a quarter is specified by donors to support professorships and teaching. Nearly a fifth is dedicated to scholarships, fellowships and prizes. A quarter is available for general University purposes. The remaining endowment funds are donor-designated to support specific departments or programs.