Today, Stanford University announced a 14.3% investment return in its Merged Pool for the year ending June 30, 2025, bringing its five- and 10-year annualized return to 11.7% and 9.4%, respectively. These returns are net of internal and external costs, but do not reflect the Federal excise tax to which Stanford and a small number of other universities are subject. The Merged Pool is the university’s principal investment vehicle.
Stanford’s performance exceeded the 10.9% median return for U.S. college and university endowments last year, as preliminarily reported by Cambridge Associates. On a five- and 10-year basis, the median college and university endowment returned an annualized 10.9% and 7.9%, respectively. Over the same one-, five-, and 10-year periods, a typical “70/30” passive portfolio of global stocks and high-quality U.S. bonds returned an annualized 12.9%, 9.1%, and 7.4%, respectively.
“We remain focused on achieving attractive long-term risk-adjusted returns that will sustain Stanford’s mission of teaching and research in the coming years and decades,” said Robert Wallace, chief executive officer of Stanford Management Company. “The endowment’s objective of supporting students and scholars in perpetuity requires, over time, net gains from our investments that fully compensate for the impact of distributions from the endowment, inflation, and taxes.”
In light of the Federal excise tax increase from 1.4% to the new 8.0% rate, as well as the uncertainty around levels of Federal funding for research, the endowment remains a critical part of Stanford’s operating budget. In fiscal year 2025, the endowment disbursed $1.9 billion, nearly double the $1.1 billion disbursed in 2015, to support vital academic programs, provide need-blind admissions to students from the United States, offer generous levels of financial support for the education of all students, and enable faculty, students, and staff to advance Stanford’s mission of teaching and research. In addition, though approximately 75% of endowment payout is restricted to specific purposes, the unrestricted portion helps in times of fiscal challenge to protect against even deeper budget reductions.
In Fiscal Year 2026, $2.0 billion is expected to flow from the investment portfolio to the university’s operating budget, further contributing to innovative research and clinical care, including ground-breaking technologies, life-saving medical treatments, and scholarship across Stanford’s seven schools and numerous interdisciplinary institutes. These initiatives are made possible by the generosity of donors and the responsible stewardship of endowed funds in Stanford’s long-term, disciplined investment strategy.
Over time, the endowment must achieve long-term growth after spending to offset the effects of inflation and maintain its purchasing power to support future generations of students and scholars. The university’s Merged Pool investment portfolio is designed to provide this return over very long periods of time while limiting excess volatility.
In addition to a significant portion of the university’s endowment, the Merged Pool also includes capital reserves of Stanford Health Care and Stanford Medicine Children’s Health, along with other long-term funds. The value of the Merged Pool on June 30, 2025, was $47.7 billion.
The university’s endowment, which includes those endowed funds invested in the Merged Pool as well as other real estate assets on and around campus, was $40.8 billion on Aug. 31, 2025, the end of Stanford’s fiscal year.
Stanford Management Company, the university’s investment office, manages the Merged Pool in accordance with the principles of duty and care under fiduciary law, as well as Stanford’s Ethical Investment Framework.
