What is an Endowment Fund?

Endowment funds are held by registered organizations for certain non-profit purposes. They are financed by donations from one or more patrons and are usually managed by educational, cultural and charitable institutions and those established specifically for the special purpose of the fund. Generally, the investment objective of endowment funds is to generate a stable income stream, and they are only willing to take a small risk. However, the trustee of the endowment fund may also set other investment objectives according to the different investment environment.