911±¬ÁÏÍø endowment portfolio returned -0.7% in the first half of 2018
The average return of the 911±¬ÁÏÍø endowment portfolio since its inception has been 4.9% per annum, net of fees. In the first half of 2018 the total return net of fees of the endowment was -0.7%. The market value of the endowment portfolio was EUR 1 044 million (EUR 1 052 million 31.12.2017). Of the cumulated real return of the endowment portfolio, a spending of EUR 2 million was used to fund the university operations in the first half of 2018.
At the end of June 2018, 38 (44) % of the endowment portfolio was invested in fixed income, 56 (52) % in equities and 6 (4) % in alternative risk. Allocation to alternative risk was increased in line with the endowment strategy. In addition, allocation to equity risk was increased due to allocation changes and investments in the private equity programme.
In the first quartile market volatility increased due to worries on interest rate hikes, political risks and threat of trade war. Still, during the second quartile, developed equity markets turned positive. After the first half of 2018, the biggest positive return contributors were investments in North American equities and private equity.
Investments in emerging market debt and equities weighed on portfolio return. Return on fixed income ended up slightly negative after yields rose specifically in US. The interest rate sensitivity of the endowment portfolio was kept on low levels. Market neutral alternative risk suffered from weak performance of trend following and systematic risk premia strategies. The currency risk had positive contribution to total return.
|
Allocation 30.6.2018 |
Return 06/2018 |
Annual return since inception (05/2010) |
|
|
Risk free |
15.8% |
0.0% |
1.0% |
|
Interest rate risk |
4.3% |
-0.5% |
2.2% |
|
Credit risk |
18.3% |
-3.0% |
3.6% |
|
Equity risk |
56.1% |
0.6% |
8.4% |
|
Alternative risk |
5.6% |
-6.1% |
-0.2% |
|
Aalto Endowment Portfolio |
100% |
-0.7% |
4.9% |
Not audited figures.
Additional information:
Head of Investments Kati Eriksson
911±¬ÁÏÍø
+358 40 563 6110
kati.eriksson@aalto.fi
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