The U.S. stock market had another exceptional year in 2024, with the S&P 500 rising 25%, marking a second consecutive year of gains exceeding 20%. The rally was fueled by a resilient economy, strong corporate earnings and advancements in artificial intelligence. International equities, represented by the MSCI ACWI ex U.S. Index GD index, recorded a modest gain of 6% during the same period. Meanwhile, the U.S. fixed-income market, measured by the Bloomberg US Aggregate Index, returned a slight gain of about 1%, while high-yield bonds demonstrated resilience, reporting an 8% gain in 2024. Despite the overall strong market gains, volatility remained elevated throughout the year due to central bank policies, geopolitical tensions and inflation concerns, underscoring the importance of diversification, strategic asset allocation and active risk management in investment portfolios.

The Foundation’s total portfolio, well-diversified across various asset classes, delivered a solid return of 12.4% in 2024, following a robust 14.1% return in 2023. Its one-year return ranked in the top 20th percentile, while its three-year return placed in the top 9th percentile within Northern Trust’s Foundation and Endowment (F&E) universe. The portfolio also outperformed the median return of this peer group over the 5-, 7-, and 10-year periods. Additionally, it surpassed the Reference Benchmark (60% MSCI All Country World ND Index / 40% Barclays U.S. Aggregate) across the 1-, 3-, 5-, 7-, and 10-year timeframes.

Throughout 2024, the Foundation regularly rebalanced its investments to align with its long-term target asset allocation, making adjustments within each asset class based on market conditions and spending needs. At year-end, the portfolio’s asset mix consisted of 45% long-only equities, 17% fixed income, 2% cash, 13% hedge funds and 23% private assets. This allocation was closely in line with the strategic asset composition, which included 44% long-only equities, 18% fixed income, 2% cash, 12% hedge funds and 24% private assets.

The Foundation’s investment objective remains focused on achieving maximum long-term total return to support a strong grants program while ensuring consistent asset growth that outpaces inflation. Since Goldman began guiding the Foundation in August 2012, our disciplined and prudent investment approach has paid off. Despite exceptionally high inflation in 2021 and 2022, the Foundation’s portfolio has recorded an annualized net investment return of 7.8% since the end of 2012, surpassing the average inflation rate of 2.7% and spending rate of 4.7%, totaling 7.4% per year during this period.

Market volatility has intensified as we move into 2025. We remain vigilant to a wide range of risks, including escalating trade tensions, particularly between United States and China, the potential for higher inflation due to tariffs, ongoing Israel-Hamas conflicts and North Korea’s missile testing. In this uncertain environment, where equity valuations have been largely driven by a handful of leading technology stocks, we are confident that our customized strategic asset allocation—designed to navigate volatility and geopolitical disruptions—will continue to optimize risk-adjusted returns in 2025 and beyond.

The Finance Committee and the Board of Trustees meet regularly with Goldman Sachs to review asset allocation, investment strategy and the performance of the underlying investments. Northern Trust Corporation is the custodian for all the Foundation’s securities. A complete listing of investments is available for review at the Foundation’s offices. Audited financial statements were not completed in time for this publishing but will be available on the Foundation’s website in the summer.

Eva Cheng, CPA
Vice President, Finance and Chief Financial Officer