The Financial Returns from Oil and Natural Gas Company Stocks Held by American College and University Endowments

Robert J. Shapiro, Nam D Pham
2012 Social Science Research Network  
This study examines the financial performance of American college and university endowments and the assets they hold. These endowments vary in b o t h size a n d i n the public or private status of the institution, but the most important factor affecting their financial performance is their asset allocation. This study tracks the returns of each of the major asset classes held by college and university endowments over the most recent year (FY 2013(FY -2014, the most recent five-year period (FYs
more » ... ve-year period (FYs 2009(FYs -2014, and the most recent ten-year period (FYs 2004(FYs -2014. 2 Depending on the period, different asset classes produced varying rates of returns for the endowments. Over the most recent year, for example, U.S. equities and foreign equities substantially outperformed real estate securities, distressed debt and fixed-income instruments (bonds); while over the ten-year period, real estate securities and distressed debt outperformed foreign equities and Treasury bills. This analysis of returns by asset class also revealed one consistent theme: In all three time periods, shares of oil and natural gas companies outperformed both the overall returns of these endowments and the returns of every other asset class, with the single exception of the returns on all U.S. equities (including oil and natural gas stocks) over the five-year period. 3 Otherwise, investments by college and university endowments in U.S. shares of oil and natural gas companies produced the highest returns over the last year, the last five years, and the last decade.
doi:10.2139/ssrn.2542148 fatcat:hi3jjnb7b5dllk4mwuj3hd4ouy