Dartmouth's endowment increased by 18.4 percent in the last fiscal year, according to Justin Anderson, director of media relations for the College. The endowment increased in value by $415 million, rising to $3.413 billion as of June 30, according to a College press release from Wednesday.
The "general upswing in the global markets" largely contributed to the high return, and the increase in the endowment will allow the College to continue providing need-blind financial aid, as well as its academic offerings and research programs, Anderson said in an interview with The Dartmouth.
"We've seen very sound and continued growth and we think that this puts us in a very good position," he said. "We have the luxury to be thinking many, many years into the future because we feel very confident."
The increase in the endowment up from a 10 percent return in fiscal year 2010 is partially due to a "strong equity market rally" at the beginning of the fiscal year and strong positions in global public equities and venture capital, Pamela Peedin, the College's Chief Investment Officer, said in the press release. A growth in investment returns and gifts to the College, which totaled over $40 million, also contributed to the higher return, according to the press release.
"We are pleased with the endowment's solid performance in fiscal year 2011, which enhanced the flexibility of the portfolio and built an even stronger financial foundation for the benefit of current and future generations of Dartmouth students," College Trustee and Trustee's Investment Committee Chair Bill Helman '80 said in the press release.
The performance of Dartmouth's endowment was lower than similar institutions for fiscal year 2011. Stanford University's endowment grew by 19.5 percent, according to The Stanford Daily, and Harvard University's endowment posted 21.4 percent returns, according to The Crimson. The Yale Daily News reported that Yale University's endowment grew by 21.9 percent.
Anderson said that despite higher numbers at other institutions, the College's endowment returns of 18.4 percent "speaks for itself." The College should not base its long-term financial plans on other university endowments' slightly higher numbers, he said.
"That's a recipe for bad decisions," Anderson said.
Richard Fass, the vice president for planning at Pomona College who tracks university endowment numbers, said the differences among institutions' numbers are "insignificant" in the short term and that the list of top performing endowments tends to "reverse" itself year to year. Over the long term, however, universities with larger endowments tend to perform better because they can afford to have more diversified portfolios, Fass said.
While the media tends to focus on yearly endowment numbers, only long-term analysis can inform a college's financial plan, Fass said. Looking at endowment performance over the past three years, Fass said he is "cautiously optimistic" about university endowments in the future.
"The story over this past three years is a healthy recovery from a very, very deep crash and we're encouraged by that," he said. "But because of the volatility we are uncertain and nervous about the future."
Including the past year's fiscal performance, Dartmouth's endowment has posted an annualized return of 7 percent for the past 10 years, according to the press release.
Macroeconomic trends since the end of fiscal year 2011 "almost certainly" hurt endowments, but some changes are not yet reflected in information published on College endowment performance, according to Fass.
Anderson said that while markets may have been hurt over the summer, the Dartmouth endowment is appropriately positioned to handle any change.
"We think our portfolio is appropriately diverse and appropriately aggressive," he said. "We can weather a downturn if that's the way the markets go."
The College's endowment funds approximately 20 percent of Dartmouth's annual budget, the press release said.
