Home > News > Asset Allocation > Penn, Dartmouth, University of Minnesota Endowments Swing to a Loss in 2022
Asset Allocation

Penn, Dartmouth, University of Minnesota Endowments Swing to a Loss in 2022

Investment portfolios see sharp reversal from last year’s record returns.

By Michael Katz



In a sharp turnaround from last year’s record high returns, the investment portfolios for the University of Pennsylvania, Dartmouth College and the University of Minnesota endowments all declined in 2022. Penn’s endowment was negligibly lower, while Dartmouth’s and Minnesota’s endowments lost 3.1% and 5.8%, respectively, for the fiscal year ending June 30.  

The Penn Office of Investments said that Penn’s endowment produced an investment return of 0.0% for the year ending June 30. However, according to its annual report, the endowment’s investments actually closed the year down $83.9 million. But due to new gifts and other sources, the endowment’s asset value increased by $200.8 million during the year to $20.7 billion. For the 2021 fiscal year, the endowment posted a record return of 41.1%.

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Penn’s portfolio has produced five- 10- and 20-year annualized returns of 11.9%, 11.1% and 9.0%, respectively, beating its benchmark’s returns of 10.3%, 9.2% and 7.8%, respectively, over the same time periods.

The Dartmouth portfolio’s 3.1% loss brought the endowment’s asset value to $8.1 billion as of the end of the fiscal year. A Dartmouth news release says the college outperformed its benchmark, but did not report its benchmark’s performance. Without citing figures, the release also says its long-term performance is “well above” its benchmark’s performance with three-year, five-year and 10-year annualized returns of 15.1%, 13.0% and 11.8%, respectively, as of June 30. Dartmouth’s endowment produced a return of 46.5% during fiscal year 2021.

“Dartmouth’s endowment is well prepared for the market volatility we experienced this year,” Chris Lord, chair of Dartmouth’s board of trustees’ investment committee, said in a statement. “While the performance was slightly negative on a one-year basis, our focus and investment strategy are designed to ensure that Dartmouth is positioned for exceptional long-term, risk-adjusted results.”

Meanwhile, the investment portfolio for the University of Minnesota’s endowment lost 5.8% for the fiscal year ending June 30, bringing its asset value to $3.1 billion. Although this is well off last year’s 38.7% return, the university easily beat its benchmark, which lost 15.0% for the year.

An endowment update from the university says the portfolio, which is invested by UMF Investment Advisors, is intended to be highly diversified and actively managed, and has less reliance on traditional common stock exposure than a standard 65/35 equity and bond mix.  The portfolio’s asset allocation is 44.0% in global equity, 28.0% in private equity, 25.8% in credit and reinsurance and 2.2% in Treasury bonds.

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Home > News > Risk > The Pattern Resumes: Jobless Claims Slip, Stock Investors Freak Out
Risk

The Pattern Resumes: Jobless Claims Slip, Stock Investors Freak Out

After Wednesday’s rally, buoyant job stats remind investors of the Fed’s tightening ways.

By Larry Light

The good-news-is-bad-news cycle continues with Thursday’s upbeat jobless report, giving further ammunition to the Federal Reserve in its rate-raising regime. And helping stocks to renew their skid.

Initial claims for U.S. jobless benefits dropped to a five-month low last week, the Department of Labor reported, as the employment market stayed strong despite the Fed’s increases. Initial claims were 193,000, a decrease of 16,000 from the previous week. Projections were for a rise in jobless claims.

The relatively positive unemployment report was a factor in resuming its sell-off ways, which were interrupted by the previous day’s blip up, according to Wall Street strategists.  On Thursday, the S&P 500 slid 2.1% and the Nasdaq Composite lost 2.8%.

“Current labor market conditions will likely keep the Fed on track to aggressively tighten monetary policy at the next meeting in November,” wrote Jeffrey Roach, chief economist for LPL Financial, in a research note.

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Indeed, financial futures are predicting an almost two-thirds chance that the Fed will boost its benchmark rate by another 0.75 percentage point next month. That would mark its fourth straight O.75 increase. 

This all translates into higher payroll outlays, a key component of the current high inflation. Unit labor costs, the amount businesses pay workers in relation to what that labor produces, will “be at the highest since the early 1980s, and the Fed will see them as supporting a very aggressive response to the current bout of inflation,” said Bill Adams, chief economist for Comerica Bank, in a note.

“The Fed is trying very hard to inflict pain on the job market and it’s not working,” David Waddell, CEO of Waddell and Associates, told The Wall Street Journal. “That maintains the narrative that the Fed is going to have to be tighter for longer.”

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