Investment return of 11.3% brings Yale endowment value to $27.2 billion

Yale’s endowment earned an 11.3% investment return (net of fees) for the year ending June 30, 2017. The endowment value increased from $25.4 billion on June 30, 2016, to $27.2 billion on June 30, 2017.

Spending from the endowment, which is the largest source of revenue for the university and supports faculty salaries, student scholarships, and other expenses, for Yale’s 2018 fiscal year is projected to be $1.3 billion, representing approximately 34% of the University’s net revenues. Endowment distributions to the operating budget have increased at an annualized rate of 9.2% over the past 20 years. Those distributions support, among other priorities, Yale’s commitment to meeting the full financial need of every student enrolled in Yale College.

The university’s longer term results remain in the top tier of institutional investors. Yale’s endowment returned 12.1% per annum over the 20 years ending June 30, 2017, exceeding broad market results for domestic stocks, which returned 7.5% annually, and for domestic bonds, which returned 5.2% annually. Relative to the estimated 7.3% average return of college and university endowments, over the past 20 years Yale’s investment performance added $24.3 billion of value in the form of increased spending and enhanced endowment value. During the 20-year period, the endowment grew from $5.8 billion to $27.2 billion.

Long-term asset class performance

Yale’s 20-year asset class performance remains strong. Domestic equities returned 12.2%, besting the benchmark by 4.7% annually. Foreign equities produced returns of 14.1%, surpassing the composite benchmark by 7.8% annually. Absolute return produced an annualized return of 8.9%. Leveraged buyouts returned 12.6%, while venture capital returned 106.3%. Real estate and natural resources contributed annual returns of 10.3% and 15.2%, respectively.[1]