The University maintains a total return spending policy. Therefore, endowment income distributions are based on pre-determined spending needs and 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. Separating spending policy from investment policy permits asset allocation decisions to be made independently of the need for current income. The endowment is a key to continued financial stability and growth for Carnegie Mellon.
Volatility is computed as the annualized standard deviation of monthly returns.
The Investment Committee of the Board of Trustees and the Treasurer's Office continue to devote considerable attention to the investment strategy of the endowment fund with the objective of increasing investment performance while maintaining a prudent level of risk. Strong investment performance, coupled with additions to the endowment from fund raising, will provide necessary financial flexibility to the University as other sources of revenue growth constrict. Debt and bond financing.