A declining rate of income in relation to rising costs of operation makes the University's position as the nation's most highly endowed institution somewhat deceptive, a Boston Fund report on U.S. colleges and universities revealed yesterday.

The University's total endowment of $535,102,249 at the end of its fiscal year, June 30, was more than twice that of Yale, its nearest rival in this department. With industrial stocks having risen about 85 points since last June, the University's "market value" is now even higher, the report said.

Expenses last year, however, ran to $57,642,474. Income from investments could provide only 24 per cent of this, and student tuition fees accounted for merely 22 per cent, according to the report. The largest single portion of income came from gifts and bequests.

Five other institutions besides Yale and Harvard had securities with marketing values totaling more than $100 million last June. The University of Chicago controlled $169,702,000 worth of stocks, bonds and mortgages, followed by MIT with $144,118,073, Northwestern with $143,545,000, Princeton with $134,571,708, the University of California with $111,154,000, and Cornell with $108,650,975.