Harvard’s endowment posts 7.3% gain, edging out rival Yale for 2nd straight year

  • Harvard University’s endowment gained 7.3% in the fiscal year that ended in June, improving from the previous year’s 6.5% return despite pandemic-fueled market volatility.
  • The return also beat the Yale University endowment’s 6.8% climb, marking the second consecutive year Harvard gained more than its rival.
  • Several colleges raised funding concerns early in the year as the pandemic forced schools to rapidly shift to online learning.
  • The fiscal-year gains confirmed that Harvard’s $41.9 billion endowment was able to weather the market chaos. Other universities including Dartmouth, the University of California, and the Massachusetts Institute of Technology notched healthy gains.
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Harvard University’s endowment posted a 7.3% gain through the fiscal year that ended in June as the coronavirus pandemic and subsequent recession roiled financial markets.

The jump beat Yale University’s 6.8% climb through the year, marking the second-straight year Harvard’s $41.9 billion endowment returned more than its rival. The fund’s performance also beats the previous year’s 6.5% gain.

University endowments posted a median return of 2.6% over the same period, The Wall Street Journal reported, citing Wilshire Associates data. That’s less than the S&P 500’s 7.5% gain.

Several colleges, including Ivy League institutions, raised funding concerns early in the year as the pandemic forced schools to send students home and pivot to online courses. Some economists had posited that Harvard’s endowment could shrink in 2020, but markets’ resurgence through the summer saved the fund from a yearly loss.

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Harvard’s year-over-year improvement comes as its CEO, N. P. Narvekar, continues to revamp its strategy. The school hired Narvekar from Columbia University in 2016, and the chief executive has since shrunk the endowment’s internal trading and moved more capital to external managers.

The performance update followed similarly positive reports from other universities. The Massachusetts Institute of Technology notched an 8.3% return over the fiscal year, while the University of California’s endowment returned 5% over the period. The University of Virginia gained 5.3%, and Dartmouth University’s fund returned 7.6%.

Additional information on Harvard’s endowment, its performance, and strategy updates are set to be released in October when the university publishes its yearly financial report.

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