Harvard University’s endowment grew 27.1% in fiscal year 2026, its strongest return in five years, the school said in its annual financial report released Thursday.
The endowment, which beat the S&P 500’s 22.3% total return over the same period by 4.8 percentage points, now totals nearly $68 billion. This outperformance occurred amid moves by the Trump administration to penalize the school and cut off funding to the university.
“Even though markets can easily recoup what they give, this return will strengthen the endowment’s ability to support the university over time,” Harvard Chief Financial Officer Ritu Kalra and Treasurer Timothy Barakett wrote in the 49-page annual report. “The University deliberately smooths distributions so that operational support does not rise and fall with the markets. Strong investment returns therefore support Harvard’s work incrementally, through future distributions.”
These returns marked the best year for the endowment, managed by Harvard Management Company, since 2021. Harvard’s fiscal year ends June 30.
In its second-quarter 13F filing with the Securities and Exchange Commission, Harvard disclosed a $2.2 billion stake in Elon Musk’s company. EspaceX rocket and satellite company. This was the largest holding in the endowment by value, followed by Taiwan semiconductor manufacturing company at just under $350 million.
Harvard’s financial situation, however, is weakened by the measures taken by the federal government. Federally funded research revenue decreased 19.5% to $509 million in fiscal year 2026.
And beginning in the current fiscal year, “endowment resources will face an additional strain, with the federal excise tax on Harvard’s net investment income increasing nearly sixfold, from 1.4 percent to 8 percent,” Kalra and Barakett write. “We estimate the higher rate will cost approximately $300 million per year.”
“(I)n a year of filings like this,” the federal excise tax “would be several times higher,” they noted.
President Alan Garber acknowledged these headwinds, but said in his report that Harvard could still succeed.
“Together, we have the opportunity to put the University on a path to excellence that none of us can imagine today,” he said. “Despite the challenges and uncertainty, it is an exciting time to be part of a great American institution dedicated to Veritas. »
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