{"id":9035,"date":"2016-09-22T16:19:00","date_gmt":"2016-09-23T00:19:00","guid":{"rendered":"http:\/\/associatednews.info\/content\/harvard-endowment-investment-declines-2-percent\/"},"modified":"2016-09-22T16:19:00","modified_gmt":"2016-09-23T00:19:00","slug":"harvard-endowment-investment-declines-2-percent","status":"publish","type":"post","link":"https:\/\/associatednews.info\/content\/harvard-endowment-investment-declines-2-percent\/","title":{"rendered":"Harvard Endowment Investment Declines 2 Percent"},"content":{"rendered":"<p><span style=\"font-style:italic;font-size:16px\">By  <a target=\"_blank\" href=\"http:\/\/www.npr.org\/sections\/thetwo-way\/2016\/09\/22\/495105424\/harvard-endowment-investment-declines-2-percent?utm_medium=RSS&amp;utm_campaign=business\">Richard Gonzales<\/a><\/span>  <\/p>\n<div class=\"ftpimagefix\" style=\"float:left\"><a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.npr.org\/sections\/thetwo-way\/2016\/09\/22\/495105424\/harvard-endowment-investment-declines-2-percent?utm_medium=RSS&amp;utm_campaign=business\"><img decoding=\"async\" width=\"150\" src=\"https:\/\/media.npr.org\/assets\/img\/2016\/09\/22\/gettyimages-548776383-1--93a914bbe7a8dca27f38bebe814e40249baa1c89-s800-c15.jpg\" alt=\"\"><\/a><\/div>\n<div>\n<div><button>Enlarge this image<\/button><\/div>\n<div>\n<div>\n<p>Harvard University&#8217;s nation-leading $35.7 billion endowment suffered a 2 percent loss in 2016. <strong>Katarzyna Baumann#125911\/Moment Editorial\/Getty Images<\/strong> <strong>hide caption<\/strong><\/p>\n<\/div>\n<p><strong>toggle caption<\/strong> <span>Katarzyna Baumann#125911\/Moment Editorial\/Getty Images<\/span><\/div>\n<\/div>\n<p>Harvard University reported that its endowment fund suffered a loss of <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/www.thecrimson.com\/article\/2016\/9\/23\/hmc-returns-2016\/?utm_source=Email+Newsletter&amp;utm_campaign=44910213e2-News_Alert_2016_09_229_22_2016&amp;utm_medium=email&amp;utm_term=0_160d75b318-44910213e2-17560197\">2 percent, or $1.9 billion, for fiscal 2016<\/a>. It&#8217;s the single largest annual decline since <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.cnbc.com\/2016\/09\/22\/harvards-endowment-loses-2-as-stock-bets-fueled-decline.html\">the financial crisis<\/a>. The news comes after several years of poor returns calling into question the fund&#8217;s investment strategy.<\/p>\n<p>The university&#8217;s endowment, totaling $35.7 billion, is still the largest in the nation. (The University of Texas and Yale fill out the top three university endowments.) But it is down from a record $37.6 billion in 2015 when the portfolio earned 5.8 percent.<\/p>\n<p>&#8220;This has been a challenging year for endowments and clearly these are disappointing results,&#8221; Paul Finnegan, chair of the Harvard Management Co. board, said in a statement. (The 2016 Annual Endowment Report can be found <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.hmc.harvard.edu\/docs\/Final_Annual_Report_2016.pdf\">here<\/a>.)<\/p>\n<p>The medium-to-long-term performance trends show the endowment underperforming key benchmarks.<\/p>\n<p>As the <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/www.bostonglobe.com\/business\/2016\/09\/22\/harvard-endowment-investment-return-drops-percent\/e6Jj6GYxhpLOnpVH6kPI3L\/story.html\">Boston Globe<\/a> reports:<\/p>\n<blockquote>\n<div>\n<p>&#8220;For the 12 months ended in June, Harvard&#8217;s 2 percent loss compared with a 2.3 percent gain in a hypothetical portfolio of 60 percent global stocks and 40 percent global bonds. If the money had been invested just in the US stock market, it would have gained 5 percent&#8230;<\/p>\n<p>For 10 years, Harvard reported a 5.7 percent annualized gain, compared with 6.9 percent for a 60\/40 portfolio of domestic stocks and bonds.<\/p>\n<p>Over five years the difference is even bigger, with Harvard at 5.9 percent and the US markets delivering an annualized gain of 8.9 percent.&#8221;<\/p>\n<\/div>\n<\/blockquote>\n<p>Harvard Management Co. has been hampered by leadership turnover. It is searching for a CEO after Stephen Blythe, a former Deutsche Bank bond trader, resigned in July after only 17 months on the job, as the <em>Globe<\/em> reports. HMC has had three investment chiefs in the past 11 years.<\/p>\n<p>One of the questions facing Blythe&#8217;s successor will be whether the university maintains its approach of managing its money <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.bloomberg.com\/news\/articles\/2016-09-22\/harvard-endowment-s-2-percent-loss-magnifies-decade-of-struggle\">internally<\/a>, rather than farming out the job to the best managers it can find on the outside as its Ivy League rival Yale does.<\/p>\n<p>Harvard appears sobered by its portfolio&#8217;s past performance. In his closing remarks in the Annual Report, interim chief executive Robert A. Ettl writes,<\/p>\n<blockquote>\n<div>\n<p>&#8220;As we enter fiscal year 2017, the investment landscape continues to be full of uncertainty. With a backdrop of slowing growth and rich valuations, endowment returns could be muted for some time to come.&#8221;<\/p>\n<\/div>\n<\/blockquote>\n<p><strong><a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/blockads.fivefilters.org\/\">Let&#8217;s block ads!<\/a><\/strong> <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/github.com\/fivefilters\/block-ads\/wiki\/There-are-no-acceptable-ads\">(Why?)<\/a><\/p>\n<p>Source:: <a href=\"http:\/\/www.npr.org\/sections\/thetwo-way\/2016\/09\/22\/495105424\/harvard-endowment-investment-declines-2-percent?utm_medium=RSS&amp;utm_campaign=business\" target=\"_blank\" title=\"Harvard Endowment Investment Declines 2 Percent\" rel=\"nofollow\">http:\/\/www.npr.org\/sections\/thetwo-way\/2016\/09\/22\/495105424\/harvard-endowment-investment-declines-2-percent?utm_medium=RSS&amp;utm_campaign=business<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"ftpimagefix\" style=\"float:left\"><a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.npr.org\/sections\/thetwo-way\/2016\/09\/22\/495105424\/harvard-endowment-investment-declines-2-percent?utm_medium=RSS&amp;utm_campaign=business\"><img decoding=\"async\" width=\"150\" src=\"https:\/\/media.npr.org\/assets\/img\/2016\/09\/22\/gettyimages-548776383-1--93a914bbe7a8dca27f38bebe814e40249baa1c89-s800-c15.jpg\" alt=\"\"><\/a><\/div>\n<div>\n<div><button>Enlarge this image<\/button><\/div>\n<div>\n<div>\n<p>Harvard University&#8217;s nation-leading $35.7 billion endowment suffered a 2 percent loss in 2016. <strong>Katarzyna Baumann#125911\/Moment Editorial\/Getty Images<\/strong> <strong>hide caption<\/strong><\/p>\n<\/div>\n<p><strong>toggle caption<\/strong> <span>Katarzyna Baumann#125911\/Moment Editorial\/Getty Images<\/span><\/div>\n<\/div>\n<p>Harvard University reported that its endowment fund suffered a loss of <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/www.thecrimson.com\/article\/2016\/9\/23\/hmc-returns-2016\/?utm_source=Email+Newsletter&amp;utm_campaign=44910213e2-News_Alert_2016_09_229_22_2016&amp;utm_medium=email&amp;utm_term=0_160d75b318-44910213e2-17560197\">2 percent, or $1.9 billion, for fiscal 2016<\/a>. It&#8217;s the single largest annual decline since <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.cnbc.com\/2016\/09\/22\/harvards-endowment-loses-2-as-stock-bets-fueled-decline.html\">the financial crisis<\/a>. The news comes after several years of poor returns calling into question the fund&#8217;s investment strategy.<\/p>\n<p>The university&#8217;s endowment, totaling $35.7 billion, is still the largest in the nation. (The University of Texas and Yale fill out the top three university endowments.) But it is down from a record $37.6 billion in 2015 when the portfolio earned 5.8 percent.<\/p>\n<p>&#8220;This has been a challenging year for endowments and clearly these are disappointing results,&#8221; Paul Finnegan, chair of the Harvard Management Co. board, said in a statement. (The 2016 Annual Endowment Report can be found <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.hmc.harvard.edu\/docs\/Final_Annual_Report_2016.pdf\">here<\/a>.)<\/p>\n<p>The medium-to-long-term performance trends show the endowment underperforming key benchmarks.<\/p>\n<p>As the <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/www.bostonglobe.com\/business\/2016\/09\/22\/harvard-endowment-investment-return-drops-percent\/e6Jj6GYxhpLOnpVH6kPI3L\/story.html\">Boston Globe<\/a> reports:<\/p>\n<blockquote>\n<div>\n<p>&#8220;For the 12 months ended in June, Harvard&#8217;s 2 percent loss compared with a 2.3 percent gain in a hypothetical portfolio of 60 percent global stocks and 40 percent global bonds. If the money had been invested just in the US stock market, it would have gained 5 percent&#8230;<\/p>\n<p>For 10 years, Harvard reported a 5.7 percent annualized gain, compared with 6.9 percent for a 60\/40 portfolio of domestic stocks and bonds.<\/p>\n<p>Over five years the difference is even bigger, with Harvard at 5.9 percent and the US markets delivering an annualized gain of 8.9 percent.&#8221;<\/p>\n<\/div>\n<\/blockquote>\n<p>Harvard Management Co. has been hampered by leadership turnover. It is searching for a CEO after Stephen Blythe, a former Deutsche Bank bond trader, resigned in July after only 17 months on the job, as the <em>Globe<\/em> reports. HMC has had three investment chiefs in the past 11 years.<\/p>\n<p>One of the questions facing Blythe&#8217;s successor will be whether the university maintains its approach of managing its money <a target=\"_blank\" rel=\"nofollow\" href=\"http:\/\/www.bloomberg.com\/news\/articles\/2016-09-22\/harvard-endowment-s-2-percent-loss-magnifies-decade-of-struggle\">internally<\/a>, rather than farming out the job to the best managers it can find on the outside as its Ivy League rival Yale does.<\/p>\n<p>Harvard appears sobered by its portfolio&#8217;s past performance. In his closing remarks in the Annual Report, interim chief executive Robert A. Ettl writes,<\/p>\n<blockquote>\n<div>\n<p>&#8220;As we enter fiscal year 2017, the investment landscape continues to be full of uncertainty. With a backdrop of slowing growth and rich valuations, endowment returns could be muted for some time to come.&#8221;<\/p>\n<\/div>\n<\/blockquote>\n<p><strong><a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/blockads.fivefilters.org\/\">Let&#8217;s block ads!<\/a><\/strong> <a target=\"_blank\" rel=\"nofollow\" href=\"https:\/\/github.com\/fivefilters\/block-ads\/wiki\/There-are-no-acceptable-ads\">(Why?)<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-9035","post","type-post","status-publish","format-standard","hentry","category-business-2"],"_links":{"self":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/posts\/9035","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/comments?post=9035"}],"version-history":[{"count":0,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/posts\/9035\/revisions"}],"wp:attachment":[{"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/media?parent=9035"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/categories?post=9035"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/associatednews.info\/content\/wp-json\/wp\/v2\/tags?post=9035"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}