The University of Helsinki’s investment assets generated a negative return of -14.8% in the first half of 2022. The return for the benchmark index was -12.1%, reflecting the negative trend of the global capital market due to increasing economic uncertainty.
Listed stocks generated a loss of -18.0%, while their benchmark index generated a loss of -13.2%. The difference was primarily due to the overweighting of spinout company stocks and the underweighting of fossil fuel producer stocks.
The return on listed bonds was -9.1%, while the corresponding figure for their benchmark index was ‑10.3%. The difference in bonds was primarily explained by a lower interest rate risk.
The University’s heavily stock-oriented portfolio is sensitive to market fluctuation
“The first half of the year reminded us that the expected returns are compensation for risk. Roughly 95% of our investments are traded on exchanges, which is why market fluctuations are immediately reflected almost fully by our returns,” says Chief Investment Officer Anders Ekholm.
Since the beginning of 2019, when the current investment policy was adopted, the investments of the University of Helsinki have generated an annual return of 13.2%. The corresponding return for the benchmark index has been 8.8%. In other words, the University’s investments have yielded an annual return 4.4 percentage points higher than the benchmark index, including the first half of 2022.
“We take a long-term approach to our investments, which is why we also evaluate them over the long term. At the end of July, this year’s loss had shrunk to under nine percent, reflecting the speed and randomness of short-term returns,” Ekholm adds.