The University's investment assets at June 30, 1999, had a fair market value of just under $2.1 billion. Endowment funds represented more than $1.5 billion of these assets. The endowment is a collection of over 2,030 separate accounts established by donors to support faculty chairs, scholarships, research, and a variety of other purposes. The majority of the endowment assets are pooled for investment purposes in the Endowment Investment Pool. The Committee on Investments of the Board of Trustees oversees the investment of the endowment and the other financial assets of the University. For the year ended June 30, 1999, the Endowment Investment Pool had a return of 8.6 percent. For the year, the benchmark S&P 500 Index had a return of 22.8 percent, and the Lehman Bros. Government/Corporate Bond Index had a return of 2.7 percent. The Pool's performance in fiscal 1999 follows a long-established trend of double-digit returns. The returns reflect, in part, the fact that over the course of the year more than 30 percent of the Pool's assets were invested in fixed income securities. It was a difficult year for bond investors as evidenced by the returns of the Lehman Index. Fixed income returns for the year reflect the impact of the Asian and Russian financial crises in the summer and fall of 1998 and the recent rise in interest rates spurred by the specter of inflation and Federal Reserve action. Investment performance was also held back by the exposure to emerging markets, albeit a small exposure, and by underexposure to the very large company growth-driven stocks. Except for the quarter ending June 30, when the markets started favoring smaller, more value-driven stocks, only the very largest stocks performed well. Fiscal 1999 was a year of significant change in the Endowment Investment Pool. The Investment Committee rebalanced the domestic equity allocation from a growth bias to a more equal allocation to growth and value. This was accomplished by appointing a large capitalization value-oriented investment manager to replace two growth equity accounts. In addition, the foreign equity portion of the Pool was restructured by replacing an international equity manager with two new international equity managers. To further diversify the fixed income portfolio, two new managers were added. Finally, in its effort to bring the Endowment Investment Pool's exposure to alternative investments up to its target 10 percent allocation, the committee approved $46.5 million in additional commitments to venture capital and private equity funds. The Endowment Investment Pool is well-positioned for consistent performance under a range of market environments. Endowment Investment Pool Asset Allocation Type of Fund June 30, 1999 June 30, 1998 Domestic Equities 50.4% 46.4% Fixed Income 28.0 31.3 International Equities 16.8 16.3 Special Investments 2.7 3.6 Cash and Equivalents 1.4 1.7 Miscellaneous 0.7 0.7 Total 100.0% 100.0%

HOMEWOOD APARTMENTS The Homewood Apartments, renovated at a cost of approximately $18.2 million, provide offices, retail space, and student housing for the Homewood campus. The project, completed early in 1997, was significant for adding the first new retail space to the Charles Street corridor in many years, and includes a hair salon, music store, coffee bar, and a major national chain restaurant slated to open late in 1999. More than 200 Hopkins students-almost all of them undergraduates-live year-round in the building, which features furnished apartments ranging from efficiencies to four-bedroom units. In addition, the building is home to the University's Office of News and Information, including The Gazette and Johns Hopkins Magazine.       SCHOOL OF PUBLIC HEALTH The new wing on the School of Public Health building is actually two additions. The first, completed in 1996, added critically needed office space, a new Monument Street entrance, and other important resources. It received an Honor Award for Design Excellence from the American Institute of Architects. The paint on the new walls hardly had time to dry when an anonymous donor came forth with a $5 million gift enabling the School to extend the addition all the way to Washington Street. The newest structure, extending to the left beyond the glass middle section and completed in July of 1999, provides space for faculty and doctoral students, houses staff previously located in other buildings, and provides a central location for the School's innovative distance education program.

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