Aalto University endowment portfolio returned 3.1% in the first half of 2017
The Aalto University endowment portfolio total return net of fees was 3.1% in the first half of 2017 (0.5% in H1 2016). The average return since inception has been 5.2% per annum. The market value of the endowment portfolio was EUR 977 million (EUR 948 million 31.12.2016).
At the end of June 2017, 49% of the endowment portfolio was invested in fixed income, 47% in equities and 4% in alternative risk. Allocation to alternative risk was increased during the first half of the year in line with the endowment strategy. Return from fixed income was 0.8%, from equity investments 5.1% and from alternative risk -1.2%.
Risky asset classes continued to perform strongly in the first half of 2017. The biggest positive return contributors were investments in European equities and emerging markets debt and equity, which together formed significant part of the total allocation. Towards the summer, market sentiment turned into slightly more cautious tone. Yields increased especially in Europe, which led to poor return on interest rate risk in general. Nevertheless, the interest rate sensitivity of the endowment portfolio was kept on low levels and return on fixed income remained positive. The appreciation of Euro against other currencies had negative contribution to total return.
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.
More information:
Head of Investments Kati Eriksson
Aalto University
+358 40 563 6110
[email protected]
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