![]()
- Sales of New Homes Forecast to Rise 2%
- Americans Ditch Planes for Trains this Thanksgiving
- Half of Banks' Losses May Still Be Hidden: IMF Head
- Obama Reiterates Commitment to Boost US-India Ties
- FDIC's Bair Cautions on Risks in Bank Break-Up Plan
- Wednesday's Economic News Crunch Could Tilt Markets
- Call Me Crazy: Confessions of a Black Friday Shopper
- Starbucks Eyes China as Next Major Market
- Citi Mortgage Reveals Something the US Treasury Won't
- Citi Mortgage Reveals What Treasury Won't
- S&P to Hit 1,200 by Year-End: Chief Investor
- Amended Berkshire Hathaway Filing Indicates No Secret Stock Stakes at End of Q3
- Facebook's Biggest-Ever Holiday Shopping Season
- Facebook's New Dual Class Structure - Slow Steps to an IPO
- 5 Big Bank Stocks Investors Should Consider: Strategists
- Gambling Drunk, Texting to Live And America's On Sale - Your Emails
- Nov. 24: Unusual Volume Leaders
- NBA D-League On The Rise
MOST SHARED
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Wednesday's Economic News Crunch Could Tilt Markets
- NBA D-League On The Rise
- The Social Media Gaming Threat
- Obama Reiterates Commitment to Boost US-India Ties
- Stifling Anger at Work Can Kill, Survey Finds
- Japan Export Rebound Eases Fear of New Recession
- Australia Wheat Exporters Face Challenges: GrainCorp
University endowment managers may be little-known, but they invest more than $340 billion and have an uncanny knack for beating the market.
Over the last four years, endowments and foundations as a group have beaten both the S&P 500 and a mix of the S&P and the Lehman Aggregate Bond Index. Over the last 10 years, endowments worth more than $1 billion averaged returns of 11.4 percent per year compared with the S&P’s 8.3 percent.
“The endowments and foundations don't have the incentive to go public in quite the way that other investments managers do,” said Brett Hammond, chief investment strategist for TIAA-CREF. “Their job is to work behind the scenes to develop options, asset allocation alternatives that can do well for them.”
As such, these managers lead the push into alternative investments like private equity, hedge funds, real estate and natural resources, helping them earn an average one-year return rate of 10.7 percent for fiscal year 2006.
In fact, allocations to traditional assets have declined 1 to 2 percentage points a year over the past ten years, according to a study by the National Association of College and University Business Officers (NACUBO) in conjunction with TIAA-CREF. As a result, the portion of investments in asset classes other than equities and fixed income has more than tripled over the last decade from 5.4 percent to 17.3 percent of investment portfolios.
The investment performance provides colleges and universities with income to help support their educational and operating expenses, as well as offset their endowment management fees and reinvest a share of the income to preserve the value of the endowment against inflation.
Some institutions, like Princeton University, have done so well that the schools have eliminated all loans for students, replacing them with outright grants. But can they maintain those returns and the subsequent grants now that the investing climate has changed? Already, many of these endowments are heading overseas to infrastructure investment in China, India and other investments like private equity in developing nations.
“The question is now, where is the long-term return going to come from?” Hammond said. “What I think you'll see now is some of the big institutions leading the way as they enter international.”
- Remember when auto shows were major events where new models could generate buzz?
- CNBC’s Mike Huckman visits a cutting-edge plant to see how the flu vaccine of the future is being made.
- People who bottle up their anger at work are up to five times more likely to suffer a heart attack, a study found.
- Playboy will outsource its publishing operations in a bid to become profitable again.
- A new McDonald's in Manhattan is the nation's first to sport a sleek, chic interior imported from stores in London and Paris.
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.











