By Gillian Wee
Aug. 5 (Bloomberg) -- Endowments and foundations gained an average of 20 percent in the year ended June 30, their best performance in 14 years, according to consultant Wilshire Associates Inc.
The non-profits lagged behind the 31 percent increase, including dividends, of the Standard & Poor?s 500 Index over the same period. In the past year, endowments and foundations on average had about 55 percent of their portfolios allocated to stocks, 22 percent to bonds and 2.4 percent to cash, according to Santa Monica, California, based Wilshire.
Endowments lost a record 19 percent in the year ended June 2009 after the September 2008 bankruptcy of Lehman Brothers Holdings Inc. crippled financial markets, according to Wilshire. That prompted hundreds of layoffs, construction delays, discounted sales of illiquid investments and debt issuance. Investments at the two wealthiest U.S. schools, Harvard University in Cambridge, Massachusetts, and Yale University, in New Haven, Connecticut, declined a record 27 percent and 25 percent respectively.
The following year, the endowments rebounded, gaining 12 percent, Wilshire research shows, compared with a 14 percent increase in the S&P total return. This past period?s gain of 19.9 percent was the best since the 20.3 percent gain of 1997, said Kim Shepherd, a Wilshire spokeswoman.
Individual U.S. endowments usually report their figures from September. For the fiscal year ended June 30, the California Public Employees? Retirement System, the nation?s largest pension fund, said it gained 21 percent, and the California teachers program, the second-largest pension plan, 23 percent.
--Editors: Steven Crabill, Josh Friedman
To contact the reporter on this story: Gillian Wee in New York at gwee3@bloomberg.net
To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net
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