Harvard's endowment gained 27.1% in the year ended June 30. The University of North Carolina system did better, up 37.8%. About half of that came from one company, SpaceX. Greg Dowling, who advises endowments, put it to the Journal this way: “You either had SpaceX or you didn't.” MIT didn't say what it held. It gained 10.3%.
Juliet Chung's story in the paper of Friday, Oct. 16 lists the winners. Washington University in St. Louis gained 37.3%, with SpaceX and chip maker Cerebras Systems making up roughly half of that. Stanford's main fund rose 31.7%. Harvard's pot is now almost $68 billion. It held a $2.2 billion direct stake in SpaceX as of June 30, plus more through venture funds. Biotech funds and hedge funds helped too. The UNC system's new investment head said it first put money into a venture fund in 2009. Seventeen years later, he said, it's harvesting an enormous gain.
Now the number the headlines skip. The median college endowment returned 16.1%, by early data from Cambridge Associates. A plain mix of 70% global stocks and 30% high-quality U.S. bonds returned 17.9%. That mix is a common benchmark for endowments. More than half of them, with all their staff and private deals, lost to it. The winners won because one rocket company's value soared before its record IPO. SpaceX has fallen from its peak since. The gains stuck because they were booked earlier.
What the money pays for
Endowments pay for financial aid, research and teaching salaries. So the returns matter beyond the bragging. There's a new cost coming, too. A tax on a handful of wealthy research universities' investment income rises from 1.4% to 8% starting in fiscal 2027. Harvard says that's about $300 million a year, and several times more in a year like this one. Inflation, falling enrollment and lost research funds still press on higher education as a whole, a Cambridge Associates executive said.
Our read
This is Investments/Risk · IN04, and it's for educators most of all. Your pension fund and your district's foundation face the same choice these endowments did. Concentrate and maybe win big, or own the 70/30 and sleep. The median endowment picked the hard road and still trailed 17.9%. We hold the simple side of that trade. Our books own listed stocks, index funds, Treasury bills and gold. No private stakes, no venture funds. We didn't add a share this week.
The piece of your plan this touches is your own 70/30, or whatever your mix really is. Most people's accounts have likely drifted from the number on the form after two strong years. This week, add up your stock funds and your bond funds across every account and write the split on one line. If the form says 70/30 and the accounts say 80/20, you've got an endowment-style bet you never chose. You fix the fence before the cows find the gap. Getting that one line right is the first thing we do in a review, and it's worth the hour.