Has the value of Swarthmore’s endowment followed market indices such as the S&P 500?
In downturns, we typically perform better than the indices, and this market decline has been no exception. Although our equity investments have declined, our 15 percent allocation to U.S. Treasury bonds has preserved value in the endowment. Was Swarthmore prepared for such a decline? No one was prepared for the magnitude of recent losses, but Swarthmore entered this crisis—which really began in summer 2007—in a relatively strong, risk-controlled position. The bond allocation provides stable income during a downturn. We also converted our variable-rate debt to fixed-rate notes before the credit crisis became severe. Our equity positions were well diversified, and the majority of assets in the endowment are readily sold, so that there is ample liquidity. All of this has given us flexibility and the benefit of time. How much does Swarthmore depend on its endowment? In recent years, more than half of the College’s annual budget has been derived from the endowment. Our long-term strategy is
