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Harvard Endowment: Underperformance or a Solid Return?

Sep 12, 2010 • Financial Markets • 176 Views    2 Comments

I thought you might want to see how The Wall Street Journal and the NY Times had different interpretations of the same facts on the same day about Harvard’s endowment fund performance:

From The Wall Street Journal: “Harvard Endowment Gets Middling Grade”

Harvard University’s endowment posted an 11% return for the 12 months ended June 30, underperforming markets but reversing a big decline in the year-ago period.”

From the NY Times: “Harvard Endowment Reports 11% Return for Year”

“A year after a disastrous 27 percent decline that prompted layoffs, salary freezes and a halt to some campus expansion, the Harvard endowment on Thursday reported a solid 11 percent increase in its $27.4 billion portfolio for the fiscal year ended June 30.”

Comments?

The Economic Lesson

The group that oversees Harvard’s endowment funds is called an institutional investor. Associated, for example, with pension, hedge, and mutual funds, institutional investors manage large pools of money for firms and groups of individuals.

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  • Alissa Anzevino

    I would have to agree with Emily on her statement that any gain is a good gain. The New York Times seems to be emphasizing the underperformance of the endowment in the market; however when considering the enormous amounts of money at hand, “underperformance” isn’t necessarily becomming a detrimental factor in Harvard’s finanical predicament.

  • EmilyMiller

    This is interesting how two reputable sources can offer such different views. In the case of Harvard’s endowment, I believe that any increase, be it small or large, is beneficial. While it could take years for Harvard’s endowment to recover, any upward trend can provide hope that perhaps the recession is on it’s way out. While the Wall Street Journal may believe that the endowment is underperforming the market, the NY Times takes a more realistic view and appreciates the gain. Any gain is good gain, and after a 27% decline, a 11% increase can do a lot of good.

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