Note1: Endowment and Similar Funds

The major portion of the investments of the endowment and similar funds is pooled under two major funds. The Consolidated Endowment Fund is the general endowment pool for the University. The University has adopted an investment objective whereby the average annual return over the long term should equal the rate of inflation (measured by the Consumer Price Index) plus its average level of spending from endowment income. The annual return for the Consolidated Endowment Fund was 3.6 percent in 1994 and 18.1 percent in 1993. These percentages have been computed using realized and unrealized gains and losses and investment income. The rate of inflation plus the average level of spending from endowment income was 6.7 percent in 1994 and 7.2 percent in 1993.

The Eminent Scholars Fund is the second major pooled fund. The primary investment objective of this fund is to earn a return each year that meets current spending requirements and maximizes participation by the Commonwealth of Virginia in the Eminent Scholars Program. The annual return for the Eminent Scholars Fund was 3.1 percent in 1994 and 14.5 percent in 1993. These percentages have been computed using realized and unrealized gains and losses and investment income. Current spending requirements were 5.7 percent in 1994 and 5.5 percent in 1993.

Both the Consolidated Endowment Fund and the Eminent Scholars Fund are pooled using a market value basis, with each individual fund subscribing to or disposing of units (permanent shares) on the basis of the market value per unit at the beginning of the calendar month within which the transaction takes place. A summary of endowment and similar funds at market value as of June 30 is presented below:

Endowment and Similar Funds, 1994 (in thousands)
 Consolidated
Endowment Funds
Eminent Scholars
Funds
Separately
Invested Funds
Total
Cash and Equivalents $ 26,771 $ 2,350 $0 0,95 $029,216
Mutual and Money Market Funds 75,798 -- 3,844 79,642
U.S. Government Securities 62,626 20,546 1,313 84,485
Corporate and Municipal Bonds 13,983 819 429 15,231
Corporate Notes 9,514 5,407 834 15,755
International Bonds and Notes 16,752 -- -- 16,752
Common and Preferred Stocks 214,051 57,850 8,165 280,066
Advances to Foundations (Note 3c) -- -- 36,328 36,328
Real Estate and Other Tangible Property -- -- 404 404
Mortgages 11,553 -- -- 11,553
Other Intangible Property 98,334 -- 438 98,772
Total Assets $529,382 $86,972 $51,850 $668,204
Number of Permanent Shares 553,379 315,970 N/A 
Number of Participating Shares 552,700 305,604 N/A 
Market Value Per Share $ 963.70 $275.26 N/A 
Earnings Per Share $ 27.45 $012.74 N/A 
Distribution Per Share $ 40.93 $016.25 N/A 
Investment Income $015,171 $03,893 $ 3,138 
Realized Net Gain $056,471 $ 2,709 $ 342 
Unrealized Net Gain $ 60,407 $15,856 $ 2,026 

Endowment and Similar Funds, 1993 (in thousands)
 Consolidated
Endowment Funds
Eminent Scholars
Funds
Separately
Invested Funds
Total
Cash and Equivalents $ 3,602 $ 2,199 $ 238 $ 6,039
Mutual and Money Market Funds 44,044 2,862 3,898 50,804
U.S. Government Securities 79,669 22,667 1,203 103,539
Corporate and Municipal Bonds 9,805 53 2,116 11,974
Corporate Notes 20,220 5,115 488 25,823
International Bonds and Notes 27,911 -- -- 27,911
Common and Preferred Stocks 270,441 49,771 7,907 328,119
Advances to Foundations (Note 3c) -- -- 35,166 35,166
Real Estate and Other Tangible Property -- -- 399 399
Mortgages 15,923 -- -- 15,923
Other Intangible Property 56,915 204 399 57,518
Total Assets $528,530 $ 82,871 $51,814 $663,215
Number of Permanent Shares 547,802 293,269 N/A 
Number of Participating Shares 545,420 278,651 N/A 
Market Value Per Share $ 969.84 $ 282.58 N/A 
Earnings Per Share $ 832.97 $ 13.80 N/A 
Distribution Per Share $ 835.59 $ 14.30 N/A 

Investment Income

$ 17,981 $ 3,846 $ 4,470 
Realized Net Gain $ 27,652 $ 728 $ 225 
Unrealized Net Gain $113,134$ 19,894 $ 2,617 

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