Down Year for Institutions

You got me running
Going out of my mind
You got me thinking
That I'm wasting my time
--Electric Light Orchestra

The fiscal year for many institutional funds, e.g., pension funds and higher ed endowments, ends June 30. 2022 was not kind.

Public pension funds were down about 8%.

College endowments did even worse, losing more than 10%.

The worst performance for both since the credit collapse. To be fair, however, this down year follows one of the best years for both groups.

Down years hit pensions particularly hard due to their chronically underfunded nature. Drawdowns reduce fund capacity for meeting short and long term obligations. Making up for lost ground will likely require some combination of raising pension fund contributions, cutting benefits, and/or taking on more risk in hopes of boosting future returns. 

As for the latter option, not sure how much more room fund managers have after years of pushing the risk envelope.