Why Endowments Are Earning Less From Their Investments

The video discusses how endowments, particularly larger ones like Yale, are heavily invested in private equity, which has traditionally provided good returns. However, smaller endowments are more stock market-focused. The video explores the impact of these investment choices on college spending, noting that some institutions may need to adjust their budgets due to lower returns. The discussion also covers the tax implications for large endowments and the potential need for colleges to rethink their investment strategies, possibly shifting towards US equities.

What is the typical percentage that endowments aim to pay for spending?

How might the endowment tax affect the largest schools?