The University of Missouri’s $1.5 billion endowment returned 13.7% net of fees for the fiscal year ended June 30, the university reported in its most recent quarterly performance report.
The university reported that the endowment’s three-year, five-year, seven-year, and 10-year returns were 5.0%, 8.7%, 9.0%, and 4.8%, respectively.
For fiscal year 2017, the university reported investment and endowment income, net of fees, of $285.2 million, compared to $22.2 million for fiscal year 2016, which translates to a jump of nearly 1,200%.
The University said it is nearing the end of a transitional period in which the spending distribution rate has been lowered to 4.5% from 5.0%. “This decrease reflects diminished capital market return expectations over the medium term,” said the university in its report, “and is consistent with our mandate to maintain the purchasing power of each endowment account.”
The endowment pool goal is to invest for long-term growth, with broadly diversified investments to reduce risk. It uses a total return approach, with an emphasis on growth assets.
The fund sets asset allocation targets of 43% for global equity, and 10% each for private equity, risk parity, and real estate/infrastructure, respectively. The remaining 27% of the fund aims for allocations of 7% in opportunistic debt, 6% in hedge funds, 5% in emerging markets debt, 4% in global fixed income, 3% in inflation-linked bonds, and 2% in commodities.