University endowments with less than $1 billion in assets generally performed better this year than the largest endowments from wealthy universities like Harvard and Yale.
Harvard, Yale, Stanford University, Princeton University and the Massachusetts Institute of Technology said they are expecting declines of 25 percent to 30 percent for the fiscal year, the Wall Street Journal reports.
But the median decline for an endowment or foundation for the first 11 months of the fiscal year was 20 percent, according to Northern Trust, which manages 90 endowments.
Foundations and endowments with less than $100 million in assets were down 16 percent through the first 11 months of the year, the firm said.
Smaller endowments appear to have benefitted from having more money invested in less risky portfolios like fixed income funds.
Research by Commonfund, a nonprofit that advises colleges and schools, shows that smaller endowments have higher shares of investment in fixed income.
Endowments with more than $1 billon in assets had on average 11 percent in fixed income and 57 percent in alternatives like hedge funds in December 2008. Endowments between $51 million and $100 million averaged 19 percent in fixed income and 27 percent in alternatives.
"A lesson from this crisis is that following what the larger guys have done is not necessarily road map to success," said Daniel Jick, head of a Boston-based firm that manages endowment money for small schools, according to the Journal.
On the other hand, endowments with assets greater than $1 billion have been steadily moving into hedge funds and other higher-risk class investments.
A Greenwich Associates survey found that 44 percent of those large endowments and foundations increased their allocations to hedge funds over the past 12 months.
Last year’s dismal market performance caused foundation assets nationwide to drop about 22 percent, or almost $150 billion, according to the Foundation Center.