University of Washington's consolidated endowment fund returned a net -5.5% for the fiscal year ended June 30.
The $4.7 billion endowment fund's return exceeded its -12.8% policy benchmark for the period, according to an investment report included with the Seattle-based university's board of regents for its upcoming meeting Thursday.
For three, five and 10 years ended June 30, the endowment fund returned an annualized net 8.9%, 8.4% and 8.9%, respectively, above their respective benchmarks of 4.6%, 5.4% and 6.6%.
The endowment fund had returned a net 35.1% for the fiscal year ended June 30, 2021.
For the most recent fiscal year, the endowment fund's negative return reflected a difficult market environment for 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.
While the endowment fund did not provide returns for private equity and real assets for the fiscal year in its investment report, the combined allocation of 28% to the asset classes helped offset slightly the impact of the challenging public markets environment.
By asset class, for the year ended June 30, the endowment fund reported returns of a net 5.4% for absolute return (above its benchmark of 0.3%), followed by fixed income at a net -1.4% (above its -6.3% benchmark).
Following those were opportunistic credit with a net return of -9.9%, followed by developed markets equities at -19.3% and emerging markets equity at -23.6%.
The latter three asset classes are benchmarked to the MSCI ACWI index, which returned -15.8% for the year ended June 30.
The consolidated endowment fund's private equity and real assets asset classes were reported on a one-quarter lag with net returns of 25.1% and 19.5%, respectively, for the year ended March 31, compared with their respective benchmarks of 25.3% and 27%.
As of June 30, the consolidated endowment fund's actual allocation was 30% developed markets equities, 24% private equity, 21% absolute return, 15% emerging markets equities, 5% fixed income, 4% real assets and 1% opportunistic fixed income.
