In my September 23rd blog, I examined the 5-year average annualized investment returns (July 1, 2008 – June 30, 2013) of the nation’s largest university endowments and wasn’t too impressed. Harvard, in particular, was literally at the bottom of the pack, reporting only a 1.7% average annualized return over the 5-year period versus a 60/40 index benchmark return of 6.2% over the same time frame. In fact, of all schools, only Columbia managed to beat the benchmark. I also mentioned that Artemis, which had just gotten underway, had too few clients in 2008 to be able to compare results.
The results for fiscal year 2014 are now in for all of the endowments and are shown in the table below. I also calculate the 3 and 5-year average annualized returns, all ending June 30, 2014. In addition, I report Artemis aggregate results for both our more aggressive portfolios, which have had an average equity allocation ranging between 58-67% over the last 5 years, and our more conservative portfolios, averaging between 25-51% in equity over the period. These returns are compared to a global blended index comprised of the MSCI All World Index and the Barclays Aggregate U.S. Bond Index in two different formulations, one with 65% equity and the other at 50%.
Harvard did a little better in the 2014 fiscal year (ending June 30) earning 15.4% but this still put the endowment near the bottom of the its peers for annual returns. With the disappearance of the endowment’s dismal 2008-2009 return in the new 5-year average, Harvard’s returns look somewhat better. On a 5 year basis, Princeton comes out on top of all the endowments.
I am also quite happy with how we at Artemis stack up. Our more aggressive portfolios have beat Harvard on a 1 and 3-year basis and are neck and neck on a 5-year basis. It just goes to show that one doesn’t need a lot of alternatives, real estate and “smart” people to be in the game.