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Aalto University endowment portfolio returned 6.1% in 2016

The purpose of the endowment is to generate additional funding for top quality research and education.

The Aalto University endowment portfolio total return net of fees was 6.1% in 2016 (3.4% in 2015). The average return since inception has been 5.1% per annum. The market value of the endowment portfolio was EUR 948 million (EUR 901 million 31.12.2015). Of the cumulated real return of the endowment portfolio, an annual spending of EUR 8 million was used to fund the University operations in 2016.

At the end of 2016, 51% of the endowment portfolio was invested in fixed income, 48% in equities and 1% in alternative risk. Allocation to equities decreased slightly during the year. Return from fixed income was 4.8%, from equity investments 7.8% and from alternative risk -0.9%. The biggest positive return contributors were investments in North American equities and emerging markets debt.

In the financial markets, the year started with risky assets declining strongly 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. Both UK referendum and US presidential elections led to short periods of higher volatility, but were followed by positive market reaction. During the latter part of the year the global macro data started to improve on a broad scale and fears of a recession were gone. The year ended with relatively strong equity performance.

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.

 

Additional information:
Head of Investments Kati Eriksson
Aalto University
+358 40 563 6110
[email protected]

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