Key Takeaways
- • University endowments across 657 institutions managing $944.3 billion in combined assets reported an average 10.9% return for fiscal year 2025, with a 10-year annualized return of 7.7%, according to the 2025 NACUBO-Commonfund Study of Endowments.
- • Global equities—both actively and passively managed—and passively managed developed non-U.S. markets led performance with approximately 17% returns, while private markets and fixed-income assets also contributed meaningfully to overall results.
- • Institutions increased withdrawals from endowment pools to exceed $33 billion during the fiscal year to support operational stability, with spending directed toward student aid, faculty compensation, research, and facility operations amid economic challenges.
- • Ten-year annualized returns of 7.7% reflect stable long-term performance, though shorter-term three- and five-year returns of 10.0% and 10.2% respectively indicate stronger recent market conditions benefiting endowments of all sizes.
Summary
The 2025 NACUBO-Commonfund Study of Endowments, covering 657 higher education institutions collectively managing $944.3 billion in assets, reveals that university endowments delivered robust near-term performance while institutions increasingly relied on distributions to support operations. The survey, conducted by the National Association of College and University Business Officers and asset manager Commonfund, found an average one-year return of 10.9% for fiscal year 2025, significantly outpacing the 10-year annualized return of 7.7%, signaling that recent market strength has outweighed longer-term performance trends.
Performance across asset classes was broadly strong. Global equities—managed both actively and passively—generated approximately 17% returns, matching the performance of passively managed developed non-U.S. market exposures. Private market investments and fixed-income assets also performed well, with fixed-income delivering its strongest returns in years. This diversified strength benefited endowments across all size categories. The three- and five-year annualized returns of 10.0% and 10.2% respectively underscored sustained market tailwinds supporting educational institutions' investment performance.
Faced with economic headwinds, institutions withdrew more than $33 billion from endowment pools during the fiscal year to stabilize operations and support core activities. According to NACUBO President and CEO Kara D. Freeman, the increased distributions reflected institutional responses to economic challenges while bolstering "students, faculty, staff, research, operations, and more." This spending pattern highlights endowments' critical role as financial stabilizers for higher education, enabling institutions to maintain educational and operational commitments despite broader economic volatility. The combination of strong investment returns and elevated distributions underscores the tension between preserving long-term endowment sustainability and addressing near-term institutional needs.
Performance across asset classes was broadly strong. Global equities—managed both actively and passively—generated approximately 17% returns, matching the performance of passively managed developed non-U.S. market exposures. Private market investments and fixed-income assets also performed well, with fixed-income delivering its strongest returns in years. This diversified strength benefited endowments across all size categories. The three- and five-year annualized returns of 10.0% and 10.2% respectively underscored sustained market tailwinds supporting educational institutions' investment performance.
Faced with economic headwinds, institutions withdrew more than $33 billion from endowment pools during the fiscal year to stabilize operations and support core activities. According to NACUBO President and CEO Kara D. Freeman, the increased distributions reflected institutional responses to economic challenges while bolstering "students, faculty, staff, research, operations, and more." This spending pattern highlights endowments' critical role as financial stabilizers for higher education, enabling institutions to maintain educational and operational commitments despite broader economic volatility. The combination of strong investment returns and elevated distributions underscores the tension between preserving long-term endowment sustainability and addressing near-term institutional needs.
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