The University Record, September 17, 1996

ENDOWMENT FUND REPORT

The University Endowment Fund is an investment pool for hundreds of endowment funds and funds functioning as endowment. As with a mutual fund, purchase, redemptions and distributions are all calculated based on a participant's share holdings. The fund is valued at $1.6 billion. It is invested in a highly diversified portfolio of stocks, bonds, mortgages, real estate, oil and gas, reorganization investments, venture capital, and cash instruments.

This brief report is to inform University Endowment Fund participants of the market value of their shares and their distributions per share. It also provides information on the investment performance of the fund. The investment results shown represent total return, which includes both ordinary income and capital gains (losses).

This report is intended to communicate information on total returns, of which distributions are a part. Distributions are calculated as a percentage of the 12-quarter average share value. The distribution percentage is being reduced from 5.5% to 5.0%. Thus far, we have been able to reduce the distribution percentage while maintaining a quarterly distribution of 5.6 cents per share. The September 30 distribution will be at 5.1%. The other component of return---reinvested capital gains and, to the extent available, reinvested income---is essential to protecting endowment gifts and endowment distributions against inflation.

The University's investment managers are:

Common Stock Managers---Capital Growth Management; the Common Fund Emerging Markets Fund; Grantham, Mayo, Van Otterloo & Co.; Trinity Investment Management Corp.; Marathon Asset Management Ltd.; and Marvin & Palmer Associates Inc.

Tactical Asset Allocation Manager---First Quadrant.

Fixed Income Managers---Lowe, Brockenbrough & Tattersall Inc.; Rogge Global Partners; and STW Fixed Income Management Inc.

Investment Management Consultant---Cambridge Associates Inc.
Performance as of June 30, 1996
Goal: To protect distributions and share value against inflation.
Annualized

 

1 quarter

1 year

3 years

5 years

10 years

Inflation

0.8%

2.8%

2.8%

2.9%

3.7%

Distrubtion

1.2

4.9

5.1

5.2

5.3

Total Return Goal

2.0

7.7

7.9

8.1

9.0

Actual Total Return

3.3

17.6

11.3

12.5

10.2

Real Value Added

1.3

9.9

3.4

4.4

1.2

Market Value per Share

 

 

Sept. 30, 1995

4.59677468

Dec. 31, 1995

4.72037100

March 31, 1996

4,84274450

June 30, 1996

4.94444250

Distribution per Share

 

 

Dec. 31, 1995

0.056

March 31, 1996

0.056

June 30, 1996

0.056

Sept. 30, 1996

0.056