Endowment portfolio returns 5.5% in the first half of 2015
The Aalto University endowment portfolio total return net of fees was 5.5% in the first half of 2015 (5.0% in H1 2014). The average return since inception was 5.8% per annum. The market value of the endowment portfolio increased to EUR 945 million (EUR 898 million 31.12.2014).
At the beginning of the year, a liquidity portfolio of EUR 103 million (EUR 98 million 31.12.2014) was separated from the endowment portfolio. The liquidity portfolio yielded 0.3% in the first half of 2015. The market value of the total Aalto University portfolio amounted to EUR 1 048 million (EUR 996 million 31.12.2014).
On financial markets, the first two quarters of the year were in sharp contrast to one another. During the first quarter, the returns for both equity and fixed income markets were strong. European equity markets in particular rose as improving expectations of economic growth and support measures by the ECB helped to bolster markets. During the second quarter, however, the markets plunged, as concerns involving global growth and Greek loan negotiations arose once again. Despite the poor performance of the second quarter, investment returns for the first half of the year were good.
At the end of June 2015, 49.5% of the endowment portfolio was invested in equities and 50.5% in fixed income and money market investments. Allocation to equities was increased by approximately 5 percentage points during the first half of the year. Return from equity investments was 11.5% and from fixed income and money market investments 0.5%.
The purpose of the Aalto University endowment is to generate additional funding for world-class 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 approximately 5 percent of the university annual operative budget in the coming years.
Kati Eriksson, Head of Investment
tel. +358 40 563 6110