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ERIC Number: EJ815083
Record Type: Journal
Publication Date: 2008-Oct-3
Pages: 1
Abstractor: ERIC
Reference Count: 0
ISBN: N/A
ISSN: ISSN-0009-5982
Colleges Lower Their Expectations for Endowments
Masterson, Kathryn
Chronicle of Higher Education, v55 n6 pA15 Oct 2008
This article reports that after years of double-digit gains, college endowments are feeling the pinch from distressed financial markets. Some colleges are reporting negative rates of return for the fiscal year that just ended, and even those that performed better are wondering what the current financial crisis will mean. If the market's slide continues, or the credit crunch worsens, some institutions may put off certain projects until conditions improve. At the moment, college leaders and investment managers aren't panicking. They say economic downturns are what endowments are designed for--to provide financial stability in the long term. Endowment payout rates are typically determined by a three-year average, smoothing out the market's dips and rises. College endowments are considered stable because they are typically highly diversified. The largest are more heavily invested in hedge funds and other alternative investments, which often perform better than common stock and bonds.
Chronicle of Higher Education. 1255 23rd Street NW Suite 700, Washington, DC 20037. Tel: 800-728-2803; e-mail: circulation@chronicle.com; Web site: http://chronicle.com/
Publication Type: Journal Articles; Reports - Descriptive
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A