Harvard Endowment's Historical Returns

We've detailed Harvard's Endowment's struggles in recent months. New expectations are the reported 20+% decline was highly optimistic. Looking at Harvard Endowment's historical returns, we can guess why the deflationary environment we've experienced would cause the portfolio so much pain.



Harvard's endowment has become increasingly reliant on capital gains vs. income over the past 20 years, with income returns accounting for less than 2% of total returns in 7 of the past 8 years. In an environment characterized by asset deflation and equity market collapse (i.e. the past 6 months), capital gains get crushed.