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Barbara Coffman
IU Foundation

Last modified: Wednesday, September 5, 2007

IU endowment earnings beat benchmarks

Sept. 5, 2007

BLOOMINGTON, Ind. -- Indiana University's endowment, managed by the IU Foundation, earned 21.5 percent, net of managers' fees, in the fiscal year ending June 30. Earnings exceeded the Foundation's total target weighted index, which returned 18.3 percent during the same period.

The Foundation's index includes appropriately weighted benchmarks in relation to the asset allocation targets of the endowment portfolio, such as the S&P 500, the Russell Midcap Index and the MSCI EAFE Index, among others.

IU Foundation officials also reported that invested funds have earned a compounded annual return of 9.8 percent over the past 10 years, against 7.1 percent for the S&P 500 and 8.8 percent for the total target weighted index.

The market value of IU's endowment was $1.6 billion as of June 30. The endowment provides scholarships, fellowships, equipment, research funds and other support for IU students, faculty and programs.

"It is to the credit of our excellent Investment Committee of the Foundation's Board of Directors and the IUF staff that our invested funds continue to beat the benchmarks," said Curt Simic, president of the IU Foundation.

After a portion of the earnings is distributed to the benefiting IU department or program and managers' fees are paid, the rest of the earnings remain invested to ensure that the principal continues to grow, said Simic.

"Our goal is always to maintain the purchasing power of the endowment over time so that the university can benefit from donors' generosity in perpetuity."

Gary Stratten, vice president and chief investment officer at the IU Foundation, said, "Our directors have hired managers and adopted strategies that have enabled us to grow IU's invested funds over time. Recent volatility in the market has shown that it is vulnerable to dramatic swings. Our goal is to balance out those ups and downs, and provide a more consistent and growing income stream to IU departments and programs.

"In the past few years, we have increased the diversity of our portfolio in order to create a lower risk profile with a higher expected return," Stratten added.

"Our donors can feel confident that their gifts for IU are being handled wisely by the IU Foundation," Simic said.

For more information, contact Barbara Coffman, IU Foundation, at 812-855-1422 or For additional assistance, contact George Vlahakis, University Communications, at 812-855-0846 or