Stocks fuel rare win for smaller funds

  • University endowments with less than $50 million outperformed those with more than $5 billion
  • Stocks make up only 12.5% of all endowments
  • Smaller funds tend to allocate relatively more to stocks
  • Big endowments have posted average returns of 9.1% over the past decade
  • Rising costs and decreased gift giving pose challenges for endowments

For the 12 months through June 30, 2023, university endowments with less than $50 million gained 9.8% on average, outperforming endowments with more than $5 billion, which averaged only 2.8% returns. Stocks make up only 12.5% across all endowments, and smaller funds tend to allocate relatively more to stocks. Big endowments have posted average returns of 9.1% over the past decade. However, all of these funds face challenges due to rising costs and decreased gift giving.

Factuality Level: 7
Factuality Justification: The article provides data and statistics from reputable sources, such as the National Association of College and University Business Officers and Commonfund. It also includes quotes from industry experts. However, there is some bias in the article as it focuses on the performance of smaller university endowments compared to larger ones, and it does not provide a comprehensive analysis of all factors affecting endowment performance.
Noise Level: 7
Noise Justification: The article provides some relevant information about the performance of university endowments with different sizes and their allocation strategies. However, there is a lack of in-depth analysis and evidence to support the claims made. The article also includes some irrelevant information about rising costs and gift giving, which is not directly related to the main topic.
Financial Relevance: Yes
Financial Markets Impacted: University endowments
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses the performance of university endowments and their allocation strategies, which is relevant to financial markets. However, there is no mention of any extreme events.
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Reported publicly: www.marketwatch.com