Rochester’s preliminary net return for the fiscal year ending June 30, 2003 was approximately +4.1%. While this result is below the 8% goal contained in the University’s financial plan, it compares favorably with the benchmark return of +1.8% (comprised of 60% Wilshire 5000, 20% Lehman Aggregate and 20% EAFE). The endowment value at the end of the fiscal year was approximately $1.1 billion, roughly the same value as reported at the beginning of the year.
The relatively unchanged endowment value was attributable to an investment gain of $53 million, gifts and additions of $22 million and spending of $74 million. Early reports from Rochester’s peers suggest that the mean return achieved by large endowments in fiscal year 2003 will range from modestly negative to positive single digits. Rochester’s five-year average annual return through June 30, 2003 is +6.0% vs. -0.1% for the benchmark, while the University’s ten-year average annual return through June 30, 2003 is +9.9% vs. +7.6% for the benchmark.
The investment office continues to pay close attention to asset allocation and strategies of Rochester’s peers. The investment office expects that these monitoring efforts will maintain an allocation and investment approach that does not drastically differ from peers. The release of fiscal 2003 peer asset allocation data, expected in November, will assist in the discussions and strategic planning at the Investment Committee’s March, 2004 annual review.
The University’s 4.1% investment return in fiscal 2003 was generated through the efforts of many talented managers, investment committee members and investment office staff. It is the consensus of these groups that, over time, the University of Rochester’s target return of 8% is achievable. We anticipate a return to the targeted return as domestic economic conditions improve.
Investment Reports for Previous Years »