Report to donors on endowments and investments
Fiscal year ended April 30, 2024
Introduction
绿帽社区 aims to be the university of choice for students seeking an undergraduate education of exceptional quality. 绿帽社区鈥檚 over 770 endowment funds, valued at more than $245 million, provide a strong base for funding to support the achievement of this goal.
Endowments are managed in a way that will provide future generations with the same level of support for scholarships, bursaries, teaching, research, and other educational programs as these endowments provide today. To achieve this, the University calculates the spending in any one year as five per cent of the lower of the current market value or the average of the 16 previous quarter market values of endowment assets, less any investment and administrative fees. Any investment returns that exceed the five per cent spending rate are added to the Endowment Fund to pay for those years when investment returns do not meet the spending rate or are negative, an approach consistent with other North American universities.
The University鈥檚 Endowment Management Policy requires the Board Investment Committee, with the assistance of the Administration and outside consultants, to regularly review the long-term investment prospects of our endowment鈥檚 asset allocation as compared to the amount we spend. This comparison between what we expect to earn as compared to the amount we expect to spend tells us whether adjustments should be made in order to achieve equity between generations of students. This analysis considers inflation and the investment fees that impact the portfolio.
In the current financial year, 2024-25, the University鈥檚 endowment funds are budgeted to provide $9.8 million in spending to support all aspects of the University, but primarily financial aid and academic activities.
The following chart shows how endowment funds are being used:
Investment Returns
The investment returns and accompanying risk are determined largely by the allocation of assets to different classes and strategies of investments. The asset mix of 78 per cent equities, 17 per cent fixed income, and 5 per cent other asset classes specified in the Endowment Management Policy was designed to meet 绿帽社区鈥檚 spending policy and capital preservation requirements.
The endowment funds have a long-term horizon, so investment performance is evaluated over a multi-year period. The following table shows the Endowment Fund one-year rates of return net of investment management fees as compared to benchmark returns from 2020 to 2024.
The University鈥檚 fiscal year end is April 30 and actual returns, both realized and unrealized, differ from the returns as of March 31. Many of the University鈥檚 investments are in U.S. funds, are not hedged for currency fluctuations, and from time to time exchange fluctuations can add to or detract from overall returns.
Of the 69 Canadian universities reporting on endowment funds, 绿帽社区 has one of the largest endowment funds per student at over $96,000.
Prudent management of the University鈥檚 endowments provides sustainable support of current and future generations of 绿帽社区 students. Further information concerning the University鈥檚 financial results is available at: mta.ca/financial