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The University of Pennsylvania's endowment showed a return of 12.9 percent in the past year, the third-highest in the Ivy League. 

Administrators announced the increase at a Board of Trustees meeting late September where Penn Vice President for Finance and Treasurer MaryFrances McCourt lauded it as a "phenomenal return." 

She also characterized the gain as unique among Penn's peers. 

Since then, the other members of the Ivy League have released their endowment returns for the 2018 fiscal year, and Penn does not top the list. The return on Penn's endowment was in the top half of the Ivy League, behind Princeton, which came in first, and Brown, which came in second.

Endowments are investment accounts that can grow from both new contributions and asset returns, Harvard Business School professor Daniel Green wrote in an email to The Daily Pennsylvanian. 

He explained that an endowment's annual return strictly represents the growth of the endowment that stems from investment gains.

Both Princeton and Brown Universities' endowment returns surpassed that of Penn with the institutions boasting 14.2 percent and 13.2 percent investment gains, respectively.

Two other Ivies posted returns within a percentage point of Penn's. Yale University saw a 12.3 percent gain, while Dartmouth College saw a 12.2 percent return. 

Cornell, Harvard, and Columbia Universities completed the list with endowment returns of 10.6, 10.0, and 9.0 percent, respectively. 

Green wrote that it is difficult to compare the endowment returns of the different Ivies because of the different endowment contexts. 

"The large difference in annual returns among Ivy league endowments in a given year reflects both differences in risk exposure and differences in management skill," Green said.

Wharton professor Chris Geczy echoed this sentiment, noting that the institutions may have different spending rates, inflations rates, and limitations on their endowments — all factors that can affect the annual return. 

“It’s really challenging to tell [Ivy League endowment return rates] apart. The annual average is about 11.8. We are coming in at 1 percent more — that’s a very good place," Geczy said. "It’s higher than the long term average of endowments of this size. So, its large relative to history as well.” 

According to statistics reported by the Wall Street Journal, Penn’s returns surpassed the 9.2 percent median return of university endowments larger than $1 billion. Last year's endowment return of 14.3 percent was similarly above the median.

University spokesperson Stephen MacCarthy attributed this year's endowment return largely to two factors — positive trends in equity investments and good performances from the people who invest the funds — in an emailed statement to the DP. 

"The strong endowment performance was aided by solid global equity market returns," MacCarthy wrote. "Penn’s performance was further bolstered by strong manager performance in a number of asset classes."  

While the total value of Penn's endowment rose to $13.8 billion in the 2018 fiscal year, it still trails behind those of Harvard, Yale, and Princeton which posted values of $39.2 billion, $29.4 billion, and $25.9 billion. 

For Geczy, the University's posted return was a positive statistic, even if direct comparisons could not be made at the moment. 

"It’s hard to compare, but we performed better than most of our peers, better than our historical average, and better the national average," he noted. "I think that, on a risk adjusted basis, we did pretty well.”