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Endowment Index Gains 17.6% in 2017

Index reports highest returns in eight years.

By Michael Katz

The Endowment Index calculated by Nasdaq OMX gained 17.6% on a total return basis for the year ended Dec. 31, 2017. This is below the S&P 500, which increased 21.8% during the same period, but above the average investment returns for university endowments, which rose 13.2% for the year ended June 30, according to Bloomberg. 

The Index began the year at 1,072.11, and never once moved below that level, according to Nasdaq OMX. It said the index’s greatest retracement was just 1.64%, which occurred during the first week of August. It is the highest return for the index since 2009, when it earned 30.53% after losing 34.42% the previous year. The index rose 7.19% last year, and its three-, five-, and 10-year annualized returns are 6.87%, 8.20%, and 4.45%, respectively.

All but one of the index’s 19 components posted gains in 2017.  The top earners were natural resources-metals and mining, which surged 37.1%, emerging markets equity (up 36.8%), emerging markets equity-China (up 31.8%), natural resources-timber (up 29.8%), international real estate (up 26.5%), and equity-international developed (up 26.4%). Managed futures posted the only decline among index constituents, sliding 3.2% during the course of the year.

On an attribution basis, private equity, equity-domestic, and equity-international developed accounted for over half (56%) of the Index’s 2017 gains.

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The Endowment Index, which is co-created by Endowment Wealth Management, Inc. and ETF Model Solutions, uses an objective, rules-based construction methodology based on the portfolio allocations of more than 800 educational institutions managing more than $500 billion in total assets.  Each of the 19 sub-indexes that comprise the index are investable, and contained within those sub-indexes are more than 30,000 underlying securities. The current target allocation is 35% equity, 53% alternatives, 8% fixed income, and 4% liquidity. 

The index, comprised of investable components, is used for portfolio comparison, investment analysis, and research and benchmarking purposes. It is used by fiduciaries, including trustees, portfolio managers, consultants, and advisors to endowments, foundations, trusts, pension plans, and individual investors.

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Home > News > Asset Management Culture > Chappell Guilty of Failing to Give Information to TPR
Asset Management Culture

Chappell Guilty of Failing to Give Information to TPR

Retail Acquisitions owner who bought BHS for £1 to be sentenced on Jan. 19.

By Michael Katz

Dominic Chappell, the majority shareholder of the company that bought now-defunct British retailer BHS for £1, has been convicted of failing to give information to The Pensions Regulator (TPR).

“Dominic Chappell failed to provide us with information we had requested in connection with our investigation into the sale and ultimate collapse of BHS, despite numerous requests,” said Nicola Parish, TPR’s executive director of frontline regulation, in a statement.

“The power to demand specific information is a key investigative tool in our work to protect people’s pensions,” she added. “This conviction shows that the courts recognize its importance, and that anyone who fails to cooperate with our information notices risks getting a criminal record.”

Chappell was found guilty of three charges of neglecting or refusing to provide information and documents, without a reasonable excuse.  He failed to provide information TPR had required as part of its investigation into the sale and then collapse of BHS, including information about the purchase of BHS by Retail Acquisitions Ltd., and the participants involved, including transactions involving BHS and Retail Acquisitions Ltd. after the sale had been completed.

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TPR announced in August that it was using powers under section 72 of the Pensions Act 2004 to prosecute Chappell for stonewalling the regulator during its investigation. Chappell also failed to provide TPR with information about a possible unauthorized disclosure of restricted material. Chappell has denied the charges.

District Judge William Ashworth adjourned the case until Jan. 19, when Chappell will be sentenced at Winchester Crown Court. The case is the fifth criminal conviction initiated by TPR against individuals or organizations for failing to comply with section 72 notices. Under section 72 of the Pensions Act 2004, TPR has the power to require recipients of a section 72 notice to provide it with information and documents relevant to its statutory functions.

TPR’s separate anti-avoidance action against Chappell regarding the BHS pension plans is still ongoing.

 

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