Nonprofit Investment Stewards Episode 61 – How Endowments (Especially Schools) Can Navigate Market Volatility With Katharine Wyatt
Jun 7, 2023
Katharine Wyatt, Chief Investment Officer at Loyola University Chicago, offers invaluable insights for nonprofits facing rising costs and market turmoil. She discusses the importance of aligning endowment strategies with mission-driven values, emphasizing responsible investing and diversity. Wyatt highlights the complexities of managing portfolios during volatile periods, advocating for strategic asset allocation and active management. She also touches on the opportunities emerging from sustainable investments and new market trends, helping institutions navigate uncertain financial landscapes.
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Navigating Bear Markets
- Katharine Wyatt has managed three bear markets in four years at Loyola University Chicago.
- These include the 2018 fourth-quarter downturn, the COVID-19 crash, and the 2022 bear market.
The Death of TINA
- The era of "TINA" (There Is No Alternative) is over, and fixed income now plays a more crucial role in portfolio diversification.
- Fixed income has regained importance after a period of limited diversification benefits.
The Demographic Cliff
- The demographic cliff, a decline in student population, will significantly impact higher education finances, particularly tuition-dependent institutions like Loyola.
- Loyola's strong fiscal discipline and operating surpluses have prepared them for this challenge, but increased endowment spending is expected.