The Investment Committee determines investment objectives and strategies and appoints investment management firms to implement the Committee's strategies. The endowment's broad diversification has produced a more favorable ratio of return to volatility than a portfolio limited to domestic issues.
Volatility is computed as the annualized standard deviation of monthly returns.
The endowment's broad diversification helps to mitigate the volatility of the domestic markets. Weakness in international equities in developed and emerging markets offset some of the endowment's gains from the strong markets. The University maintains a total return spending policy. Endowment income distributions can consist of dividend and interest income and a withdrawal of accumulated capital gains when necessary. The main objective of the total return spending policy is to separate spending policy from investment policy.