Stanford endowment posts -4.2% return

Stanford Management Co. returned a net -4.2% for the year ended June 30, said a news release Tuesday from Stanford University, Palo Alto, Calif.

The management company, which manages $40.1 billion in merged investment pools that include the university's endowment, Stanford Health Care and Lucile Packard Children's Hospital, did not provide benchmark information, but said the fiscal-year return exceeded the median -6.3% fiscal-year return for U.S. colleges and universities, according to Cambridge Associates data.

For the five and 10 years ended June 30, the merged investment pools returned an annualized net 10.9% and 10.2%, respectively.

The merged investment pool had returned a net 40.1% for the fiscal year ended June 30, 2021.

For the most recent fiscal year, the negative return by Stanford's investment pool reflected a difficult market environment for the period, particularly in public equities and fixed income.

For the year ended June 30, the Russell 3000 index and Bloomberg U.S. Aggregate Bond index returned -13.9% and -10.3%, respectively, in sharp contrast to returns of 44.2% and 4.6% for the year ended June 30, 2021.

Among the 28 university endowments whose returns for the period have been tracked by Pensions & Investments through Thursday, Stanford's return fell below the median return of -3.1%.

"Diversification and disciplined portfolio management helped preserve value relative to equity and credit markets, which sharply corrected following their very material rise during the previous year," said Robert Wallace, CEO of Stanford Management Co., in the news release. "It seems prudent to expect continued financial market volatility amid economic uncertainty and an altered interest rate environment."

Returns by asset class and asset allocation information was not provided.

University spokesman Ernest Miranda could not be immediately reached for further information.