The University’s endowment earned a 21.9 percent return on investment for the year ending June 30, growing from $14.4 billion to $17.1 ­billion. 

The endowment provides about half of Princeton’s annual operating budget. Despite the strong financial results, Provost Christopher Eisgruber ’83 said, effects of the recession and “persistent volatility in the financial markets” mean that the University will continue to maintain budget discipline and rebuild its financial reserves.

The University seeks to spend between 4 and 5.75 percent of the endowment’s value each year; for the past year the spend rate was 5.1 percent and for the current year it is expected to be 4.4 percent.

The endowment had been valued at $16.3 billion in June 2008 before the financial crisis hit, but declined to $12.6 billion a year later. In February 2009 University officials worried that it could take as long as a decade for the endowment to regain the value it had lost.

The endowment’s average annual return was 9.8 percent for the past 10 years, the University said. 

Peer institutions also reported strong endowment returns for the past year, including Stanford (22.4 percent), Yale (21.9), Harvard (21.4), Cornell (20), Penn (18.6), Dartmouth (18.4), and MIT (17.9).