At Yale and Princeton, for example, the portfolios were more heavily invested in stock, and consequently, their returns were down approximately 5 to 8 percent, Putnam said.

Putnam said that although he is never fully satisfied with the University's investment results. "Harvard has had a strong recovery and we're pleased with it.

Harvard's $2 billion endowment is approached in size only by the oil-rich University of Texas, Yale and Stanford, among others, lag behind in the $800 million to $1 billion range.

Income from Harvard's endowment meets about 20 percent of its approximately $500 million worth of annual expenses.

The recent success in the financial markets will not have an immediate effect on how much Harvard's various faculties can hope to receive as their share of the endowment income. For several years, the Corporation has decided to increase distribution of income at 4 percent each year for each faculty and department.

The Corporation has ploughed the rest of any income earned back into the endowment for further investment.

But Robert H. Scott, vice president for administration, said yesterday that if the current stock and bond boom continues for a long time, the Corporation could conceivably decide to increase the amount of endowment income distributed to the faculties