Home > News > Risk > Notre Dame Returns 12.2% in Fiscal 2018
Risk

Notre Dame Returns 12.2% in Fiscal 2018

The $13 billion endowment pool has demolished the 20-year benchmark.

By Chris Butera

The University of Notre Dame’s endowment pool returned 12.2% in fiscal 2018, reports Scott Malpass, its vice president and chief investment officer.

The endowment grew to $13.1 billion, up 11% from the previous year’s $11.8 billion achievement.

Last year, Notre Dame returned 12.6%. No benchmark was provided for this or any previous fiscal years.

The university has returned an annual 10.3% over the past 20 years. A typical 60/40 blend of stocks and bonds usually nets 5.7% each year during the same timeframe.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news.

Notre Dame’s actively managed investment program has allowed the endowment to return an excess of $8 billion over the 20-year duration.

The endowment allocates 40% of its portfolio to stocks (long and short). The remaining 60% is evenly split between private equity and multi-strategy investments, which includes credit funds, energy, and real estate. Notre Dame does not release the returns for individual asset classes.

“I am delighted to see the impact of these returns and strong stewardship on the opportunities they provide for our students and faculty in almost every area of the university,” Malpass said in a statement. He declined to comment.

Tags: , , , ,

Home > News > Market Moves > Shiller Doubts Booming Earnings, Now Propelling the Market, Will Last
Market Moves

Shiller Doubts Booming Earnings, Now Propelling the Market, Will Last

Yale professor sees stocks as way overvalued and thinks investors are fooling themselves about continued increases.

By Larry Light

Recent boffo earnings get a doubtful view from Robert Shiller, the Yale professor and Nobel Prize winner. He doesn’t think they will last.

As a result, Shiller told CNBC Tuesday, it’s a “risky time” because the investing public has lost its skepticism about the US stock market, which he termed the world’s most expensive. His own measure of stock valuations, the Cyclically Adjusted PE Ratio for the S&P 500, now stands at a lofty 33.

This gauge, called CAPE, which adjusts earning for inflation over the past 10 years to get a smoother trend, is far above the conventional price/earnings ratio for the broad market index, which is a nonetheless elevated 24. (The historical average is 15.)

Investors believe the current market boom will last a good long while, he declared, although he added that there was no forecasting how long that could be. “Right now, it is kind of a Trump narrative that’s supporting our faith in these earnings numbers,” he said, “even though you know historically strong earnings growth has generally been reversed before too long.”

Want the latest institutional investment industry
news and insights? Sign up for CIO newsletters.

In the second quarter, the S&P 500 recorded a 24.8% boost, its second-strongest earnings growth since 2010, when a post-recession surge buoyed the market. This year’s first quarter was slightly higher.

Analysts expect third quarter 2018 growth to be 19.3% and the fourth period’s earnings to rise 17.3%, according to FactSet.  And next year, they look for further slowing, although coming in at a still healthy 10.3%.

“Investors believe that this boom is going to last, or at least that other investors think it should last, which is why they are bidding up stock prices in a dramatic response to the earnings increase,” Shiller recently wrote.

Tags: , ,

«