The Performance Gap Between the Best and Worst Endowments Was ‘Astronomical’

Endowments and foundations achieved solid overall performance in fiscal year 2026, but new research from OCIO Analytics reveals extraordinary performance dispersion that has reached record levels. According to data covering 712 institutions for the 12 months ended June 30, 2026, the median return stood at 15.3%—a respectable outcome for institutional allocators. However, this headline figure obscures a dramatic bifurcation: the 25th percentile of institutions returned 18%, while top-decile performers at the 5th percentile achieved 21.1%, representing a gap of nearly 6 percentage points among the best performers alone.

The divergence becomes even more acute when examining the full performance spectrum. For the one-year period, returns ranged from 21.1% at the top to 3.1% at the bottom—an 18 percentage-point spread that underscores the consequences of differentiated investment strategy and execution. In the most recent quarter ended June 30, 2026, the gap between best and worst performers reached 13.1 percentage points across 921 institutions, marking the highest quarterly dispersion OCIO Analytics has recorded since beginning to track this data. This compression of returns into a narrow band at the top, combined with severe underperformance at the bottom, reflects fundamental differences in how institutions are constructing portfolios and selecting managers.

Three-year performance metrics similarly demonstrate persistent gaps. Among 465 institutions tracked over this longer horizon, the median return was 12.8%, with 25th percentile performers at 14.2% and top-decile performers at 16.5%—gaps of 1.4 and 3.7 percentage points respectively. The smaller sample size reflects the fact that OCIO Analytics' participating outsourced chief investment officers have not retained all their client relationships across the full three-year period.

The primary driver of this divergence appears to be the increasing role of outsourced chief investment officers entering private market assets with varying levels of sophistication and manager selectivity. Earlier in 2026, OCIO Analytics research showed that the performance gap between top and bottom performers more than doubled in 2025, driven principally by portfolio construction decisions that became obscured by robust equity market performance. Allocators have identified manager selection as the critical differentiator, particularly in private credit markets where selectivity among managers is becoming increasingly important to achieving competitive returns. This shift suggests that simple passive allocation strategies or broad-based private market exposure are proving insufficient, and institutional success increasingly depends on rigorous manager due diligence and differentiated portfolio positioning.