911�� endowment returned 15.5% in 2019

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911�� endowment returned 15.5% in 2019

Published: 18.3.2020

The purpose of the 911�� endowment and its long-term strategy is to generate additional funding for top quality research and education. Of the cumulated real return of the endowment portfolio, a spending of EUR 4 million was used to fund the university operations during the year.

Aalto-yliopiston rakennus — Of the cumulated real return of the endowment portfolio, a spending of EUR 4 million was used to fund the university operations during the year. Photo: Tuomas Uusheimo

The average return of the 911�� endowment portfolio since its inception has been 5.0% per annum, net of fees. In 2019 the total return net of fees of the endowment was +15,5% (-6.0% in 2018). The market value of the endowment portfolio was EUR 1 142 million (EUR 983 million 31.12.2018). Of the cumulated real return of the endowment portfolio, a spending of EUR 4 million was used to fund the university operations during the year.

At the end of 2019, 30 (37)% of the endowment portfolio was invested in fixed income, 57 (52)% in equities and 14 (11)% in alternative risk. Allocation to alternative risk was increased in line with the endowment strategy.

In 2019 both interest rate and equity risk had strong returns. At the start of the year, markets recovered from the drawdown seen in late 2018. Towards the end of the year, equity markets rose to all time high levels. Easy central bank policy and reduces worries over political risks and trade tensions were among the key drivers for risky assets. The equity markets saw periods of higher volatility but recovered quickly.

Majority of the return contribution came from equity risk. Interest rate, credit and FX risk also contributed positive. Alternative risk had a marginally negative contribution due to weak performance of systematic risk premia strategies.