It was another red letter year for Stanford’s endowment fund, which grew about 23 percent to $17.2 billion, as of Aug. 31.

The net gain alone amounted to $3.1 billion, a figure larger than the gross domestic product of Barbados. And over the last decade, Stanford’s pool of money has grown an average of 15.1 percent every year.

John Powers MBA ‘83, the endowment fund’s chief executive, cautioned on Tuesday that the likelihood of sustaining 20-plus percent annual returns is low.

“The last four years, with the benefit of hindsight, will look like an incredible golden period for endowment management, where literally all cylinders were firing,” he said during an hour-long interview over breakfast at the Faculty Club.

“Everything clicked,” he added. “It’s fairly unprecedented that all segments of the endowment pool will perform as well as they have.”

The financial markets roiled over the summer when the market for sub-prime mortgages collapsed, setting off a chain reaction that caused some hedge funds to default and investment companies to suffer painful losses.

Even though performance returns were reported as of June 30 — before the market corrections — Powers said the endowment fund was still up for the summer and that the University avoided the kinds of hits that some large funds sustained. The $17.2 billion figure for the endowment was as of Aug. 31, the end of Stanford’s fiscal year.

The potential for further market declines and volatility concerns Powers and his team of investment gurus, so they are being cautious and have taken a dim view on the credit markets.

“We don’t believe the shocks of July and August have worked their way completely though the system,” he said. “We still think risks in the domestic and global economies aren’t fully represented in the credit markets.”

He said the equity markets “have actually rallied really strongly” since August.

“To us,” he said, “there still seems to be a potential disconnect between sources of risk in the economy and effervescence in the equity market.”

The world’s third largest university endowment — behind only Harvard and Yale — contracts with top managers in every sector to manage its investments. The net result is a diversified portfolio with long-term horizons. Risk is mitigated by spreading out investments and using sophisticated financial instruments designed to limit downside potential.

Powers, wearing a light tan sports coat, carefully pondered and thoughtfully parsed his language as he reflected on the endowment fund’s performance. An alumnus of the Graduate School of Business, he took the helm last year after Michael McCaffery left with some of the fund’s senior managers to found his own company — Makena Capital Management.

Several other endowment leaders have left for the private sector, where they can usually earn more money. Most notably, after less than two years on the job, Harvard’s Mohamed El-Erian said last month that he would return to work for his old investment company in Southern California at the end of the year.

Powers said he has no intention of leaving.

“I have no plans to do anything other than this,” he said, explaining that he has re-staffed the Stanford Management Company, which oversees the University’s investment pool, and spent a long time rethinking its investing methodology.

A group of lawmakers on Capitol Hill has been salivating over burgeoning college endowment funds. The Senate Finance Committee held a hearing last week about requiring more disclosure from the generally secretive funds and increasing the amount that a college needs to spend every year from its endowment.

Lobbying groups have largely come out against any changes.

“We’re watching carefully,” Powers said. “We’ll respond as the regulatory environment changes. I’m confident that Stanford will be in a pretty good place to adapt to any change.”