Long-Term Pool Returns
The pool is administered on a total return basis — which includes capital appreciation as well as income yield. The long-term objective is to attain an average annual real total return (net of all investment related fees) in excess of total expenditures (spending and overhead expenses), as measured over rolling ten-year periods.
Endowment Fund Performance for Fiscal Year 2009
The decline in the financial markets over the past year has been both significant and historic. Virtually all market sectors were impacted as mortgage defaults escalated, lending institutions froze credit, and the economy slowed into a recession. To put the year into historic perspective, consider that calendar year 2008 was the U.S. stock market’s second worst year on record, with only 1931 showing a larger negative return. The recent decline impacted individual wealth, corporate stability, pension and retirement plans, and institutional endowments.
The Iowa State University Foundation was not immune to these declines. For the twelve months ending June 30, 2009, the foundation’s endowment declined 18.8%. In comparison, the S&P 500 index declined by 26.2% over the same time period while a simple diversified portfolio (80% equity and 20% fixed income) would have declined 19.8%. These benchmarks highlight the benefit of the diversification within the foundation’s investment portfolio. This diversification is critical to preserving the long term nature of the endowment while continuing to provide support to university students, faculty and programs support which is increasingly important in today’s environment.
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