While global markets have revived recently, endowments may struggle

Bloomberg Business reports.

A Rough Midterm for College Funds – Bloomberg Business

The managers of U.S. college endowments try hard to earn more for their schools than a plain-vanilla portfolio of stocks would. That’s never easy, and lately it’s been especially tough.

Fifteen endowments that provided Bloomberg with total returns for the second half of 2015 lost 3.6 percent on average. In the same period, the Standard & Poor’s 500-stock index earned a slight gain with dividends. While global markets have revived recently, endowments may struggle to make up for lost ground by the time their fiscal year ends in June.

“At this moment in time, it doesn’t look like it’s going to be a fantastic year,” says Tim Jarry, chief investment officer for the College of the Holy Cross in Worcester, Mass. The private college’s endowment saw a loss of 4 percent from July through December. Investments contribute to a school’s annual operating budget, though schools determine spending based on average returns over a few years.