June 14, 2012; Source: CNN Money
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Yesterday, the Nobel Foundation announced that because of shrinking returns on their investments, they will reduce the size of the Nobel Prize from the $1.4 million that it was last year to $1.1 million this year. A spokesperson said that the foundation had grown accustomed to a 3.5 to four percent return on investments, but is now seeing a 1.5 to two percent return.
The foundation is taking steps to restructure its investments by investing in funds that charge lower fees and by reducing the number of funds it is invested in from 40 to closer to 20 or 25. In addition, the Nobel Foundation is convening a group of Swedish financiers to advise it on its portfolio, but given the economy, the foundation does not expect a turnaround anytime soon. “There is good reason to believe that we are in an adjustment period … and that returns will continue to be fairly low over that period,” said Lars Heikensten, the Nobel Foundation’s executive director. –Ruth McCambridge