College Endowments Report Lowest Return Rate in 3 Years

Colleges’ endowments returned an average of 2.4 percent in the 2015 fiscal year, the lowest annual rate reported by the annual Nacubo-Commonfund Study of Endowments since 2012, when endowments reported a -0.3-percent return. And it’s a significant drop from 2014, when the average rate of return was 15.5 percent:

Reporting the largest endowment values for 2015 were familiar heavy hitters. Harvard University, Yale University, and the University of Texas system took the top three spots.

The annual survey also calculates return rates at three-year, five-year, and 10-year intervals. The 10-year rate declined from 7.1 percent in 2014 to 6.3 percent last year. A report on the study notes that the rate of return lags below what endowment managers consider the 10-year rate needed to offset inflation and costs — 7.5 percent.

Read a news release announcing the study.

See a list of the largest endowments reported by the survey.