Aalto University endowment portfolio returned 0.5% in the first half of 2016
The Aalto University endowment portfolio total return net of fees was 0.5% in the first half of 2016 (5.5% in H1 2015). The average return since inception has been 4.6% per annum. The market value of the endowment portfolio was EUR 905 million (EUR 901 million 31.12.2015).
At the end of June 2016, 46% of the endowment portfolio was invested in equities and 54% in fixed income. Allocation to equities decreased by 4 percentage points during the first half of the year. Return from equity investments was -2.8% and from fixed income 3.8%. In the first half of 2016 the biggest positive return contributor was investments in emerging markets debt, while European equities provided negative contribution to the return.
In the financial markets, the first half of the year was two-folded. The risky assets declined strongly during the first weeks of the year mainly due to the worries related to global growth and foreign exchange policy in China. Main part of the decline was recovered by mid-April. Nevertheless, global recession fears and UK referendum on EU membership kept the market volatility on higher level and interest rates continued to decline throughout the first half of the year.
The Board of the Aalto University Foundation has decided that, of the cumulated real return of the endowment portfolio, an annual spending of EUR 8 million will be used to fund the University operations in 2016.
The purpose of the Aalto University endowment is to generate additional funding for top quality research and education. The endowment provides the University with greater financial independence and enhances its ability to direct resources to strategic focus areas. The returns from the endowment are expected to cover ca. 5% of the University annual operative budget in the coming years.
For more information, please contact:
Head of Investments Kati Eriksson
Aalto University
+358 40 563 6110
[email protected]
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