For more than a year, college endowments have been an investment train wreck, but things appear to be turning around.
Both Howard University and the United Negro College Fund have seen improvements in their portfolios tracking the better performance in stock markets since last spring.
“It’s looking better says,” says Ken Redd, director of research and policy analysis at the National Association of College and University Business Officers. A majority of endowment assets are in U.S. and foreign company stocks. U.S. stock markets have been up by about 35 percent in general since April.
“I can only speculate but since the Standard & Poor’s 500 index has been up 40 percent since April that my guess is that endowments are up in sympathy,” Redd says.
The S&P 500 index has gone from 680 in April to more than 1000 now. The Dow Jones Industrial Average, an index based on the stocks of 30 blue chip companies, has risen about 30 percent from 6,500 in March to more than 9,300 now.
Improving markets have helped Howard, according to Sidney Evans, the institution’s chief financial officer. He says that Howard’s endowment, which peaked at about $550 million in September 2007, fell to $375 million, its lowest point recently, in March. But since then, it has steadily gained ground and is now about $410 million, Evans says.
