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Investment return strong for WSU Foundation

Steve Feilmeier
Steve Feilmeier

The return on investments for the Wichita State University Foundation was 14.5 percent in the most recent fiscal year, which was 2.5 percentage points better than the benchmark for a foundation of its size.

The investment income along with new endowed gifts boosted the WSU Foundation’s assets by more than $20 million, said Steve Feilmeier, chair of the investment committee under the auspices of the WSU Foundation National Advisory Council. Investments are overseen by the investment committee as directed by the investment policy and asset allocations approved by the WSU Foundation Board of Directors.

The WSU Foundation’s earnings growth for fiscal year 2014, which ran from July 1, 2013, to June 30, 2014, compares to a five-year annualized investment return of 10.8 percent for the organization and a 10-year annualized return of 6 percent.

Feilmeier attributed the investment growth to three factors:

  • First, the WSU Foundation’s investments are not concentrated in cash or short-term fixed income, he said. “The Foundation takes a long-term view and does not need large balances in short-term funds. Short-term yields pay virtually nothing in today’s market, so we avoided the opportunity cost of keeping too much capital in low-return investments.”
  • Second, the investment committee allocated nearly 50 percent of the WSU Foundation assets to equities or equity-like assets, and equities performed well during the year. “Most experts believe equities are reaching a full and fair value, but we stayed the course throughout the year believing the U.S. economy would strengthen, and it did,” Feilmeier said. “We maintained a diversified equity portfolio to manage the risk inherent in this asset class, and this served us well.”
  • Third, the committee’s diversifying strategies performed well, largely because the managers it employed were successful in adding incremental value to the Foundation portfolio.