Returns at the endowments of the USC, UCLA and Pepperdine University lagged both the S & P; 500 and the nation’s top endowment earners in the year ended June 30.

A report released last week by Bloomberg News found that seven of the universities with the largest endowments bested the S & P;’s 19.1 percent return in the 12-month period.

Harvard University, with the nation’s largest endowment at $22.6 billion, led the pack when it came to returns as well. The school posted a 21.1 percent overall return in the period ended June 30.

USC, which breaks its endowment into pooled and unpooled funds, recorded an overall 14.3 percent gain, to $2.4 billion during the 12-month period. The pooled portion of the endowment, which is invested like a mutual fund and does not have donor restrictions on investment types, returned 16.9 percent, net of management expenses.

UCLA also has a number of endowments and does not aggregate returns. Its $579 million endowment managed by the UCLA Foundation returned 15.2 percent in the period, while the larger $948 million endowment managed by the Regents office out of Oakland had a 14.7 percent return. UCLA’s total endowment is $1.53 billion.

Pepperdine University’s endowment fund gained 15 percent to $426 million.

Historically, endowments with more than $1 billion in assets have had higher annual returns because of better access to high-quality managers and an “earlier entr & #233;e” into promising investments, according to Damon Manetta, spokesman for the National Association of College and University Business Officers.

“The larger schools would have higher allocations to alternatives, and smaller allocations to fixed-income, which was a drag for the year,” said UCLA Investment Coordinator George Letteney. “If you’re fortunate to have more equities in alternatives and less in fixed-income, you see higher returns.” Alternatives include hedge funds, venture capital, private equity and opportunistic partnerships, Letteney said.

A report by Santa Monica-based Wilshire Associates found U.S. foundations and endowments with more than $1 billion in assets gained 0.7 percent in the three months ended Sept. 30.

“Most in the endowment world say we don’t expect returns to mirror (2004 gains) in the future,” said Pippin. “We expect more moderate returns. We’re making sure we’re diversified and not totally counting on returns on U.S. stocks and bonds to power our portfolio.”

Bloomberg News contributed to this story.