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Why College Endowments should choose

College endowments are meant to be invested to create long term success and financial stability for the college. Universities invest their endowment in order to meet spending needs such as paying professors, repairing facilities, awarding scholarships, and so on. Over the last ten years, the average college endowment earned a 4.6% annual return. This cumulates to a 57% return over a ten-year period. This sounds positive, but in reality, college endowments are underperforming. Thus, the question is: what are some alternatives?

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Two general places to look to invest are thought to be hedge funds and mutual funds, even though both have serious problems. Since 2007, hedge funds have had a cumulative return of 6.5%. This is an annual return of a meager 0.52%. This combined with a standard 2% fee on total asset value and an additional 20% fee on any profits earned makes hedge funds a terrible option. On the other hand, mutual funds have generally low fees, usually around 1%, but often have heavy load fees that can approach 5%.

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However, an issue arises because actual mutual fund management rarely outperforms the market. Therefore, hedge funds have too heavy fees – and neither hedge funds or mutual funds have much upside to them. This makes hedge funds and mutual funds poor places to turn for colleges.

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In contrast, presents low fees and serious upside for college endowments. charges a low 1% fee, which is small compared to hedge funds. More impressively, has had cumulative returns of 221.1% over the last twelve years. This resoundingly beats hedge funds meager cumulative returns of 6.5% over the same time period.’s machine learning has substantially beaten the S&P 500’s cumulative return of 145.1% over the last twelve years.

On an annual basis has returned an average of 6.8% in the last twelve years, which far exceeds all fund & market indexes of any asset class. This number tops the average college endowment returns of 4.6%. If a $1 billion endowment had a return of 6.8% rather than 4.6% over ten years, then the college would have an additional 368 million dollars. This would mean better paid professors, more scholarships, and superior facilities. Overall, a college that invests with would greatly improve its financial position. With low fees and high rate of return, offers college endowments a superior investment option.

Written by William Turchetta & Edited by Alexander Fleiss