Harvard University says its endowment has seen a dramatic reversal of fortunes, earning a profit of 11 percent and growing to $27.4 billion in the last fiscal year.

The university says in a statement posted on its website Thursday that innovative investment strategies and active risk management helped it grow its largest-in-the-nation endowment by about $1.4 billion.

Still, Harvard has a long way to go to recoup devastating losses it suffered when its endowment fell by $11 billion during the preceding financial year.

The school says the endowment paid for more than a third of Harvard's operating budget last year.

Harvard says it expects to increase financial aid for undergraduates by about 7 percent for the 2011 fiscal year.