Stanford University today announced a 4.4% investment return in its Merged Pool, net of all external and internal costs and fees, for the year ending June 30, 2023. The Merged Pool is the principal investment vehicle for the university’s endowment.

Stanford’s performance trailed the 6.9% median return for U.S. college and university endowments for the year, as preliminarily reported by Cambridge Associates. A typical “70/30” passive portfolio of global stocks and high-quality U.S. bonds returned 10.9% over the same period.

Stanford’s five- and 10-year net annualized investment performance of 9.5% and 9.4%, respectively, compares with the median college and university endowment return of 8.0% and 7.6% over the same time periods. A typical “70/30” passive portfolio returned 5.8% and 6.6% over the last five and 10 years, respectively.

“Strong results in most asset classes during the past year were partially offset by losses in our venture capital and growth equity portfolios, continuing a correction that began in 2022,” said Robert Wallace, chief executive officer of Stanford Management Company. “Viewed over multiple years, our disciplined and diversified investment approach has delivered attractive returns with moderate volatility.”

The value of the Merged Pool was $40.9 billion as of June 30, 2023. The fund also includes capital reserves of Stanford Health Care and Stanford Medicine Children’s Health, along with other long-term funds.

The value of the university’s endowment, which includes approximately 75% of the Merged Pool as well as other assets such as real estate, was $36.5 billion on Aug. 31, 2023, the end of its fiscal year. The endowment is intended to sustain university programs over the long term, and a payout each year provides critical support for current operations.

In fiscal year 2023, the endowment disbursed $1.7 billion to support vital academic programs and financial aid. Payout from the endowment funded over 22% of the university’s 2023 operating expenses. For fiscal year 2024, payout from the endowment is budgeted at $1.8 billion. The endowment must grow with inflation to maintain its purchasing power and support the university’s and donors’ commitment to students, faculty, and projects for decades to come.

The endowment includes more than 7,900 funds established by philanthropic donors over the years and designated for specific purposes. They support student scholarships and also advance particular fields of study through professorships, fellowships, and research funds.

Stanford Management Company invests the endowment and other financial assets to provide long-term support to the university. Careful stewardship of endowed funds helps ensure that important resources, including financial aid, are available for present and future generations of students, faculty, staff, and patients.

Stanford Management Company invests capital in accordance with its Ethical Investment Framework and strives to work with the most capable partners pursuing disciplined, long-term investment in the U.S. and across the world.