When David Swensen of Yale showed everyone how his portfolio can consistently outperform the market, the other university endowment funds starts mimicking close to the allocation. Swensen introduce a degree of private equity, hedgefunds into the portfolio.
Pragmatic Capitalism profiles a chart of their performance since the great finance crisis.
We are not sure if this is after fees, but I am assuming it is.
This is pretty interesting given that a 60/40 stock/bond portfolio has generated a 6.3% return, the hedge fund HFRI has generated a 4.66% return, the iShares Bond Aggregate has generated a 5.1% return and the S&P 500 has generated a 7% return.
When some things are good, but the idea gets copied, creating exceptional outperformance becomes very challenging. You would be better off investing in a total stock market index ETF.
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Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Insurance Start-up Havend. All opinions on Investment Moats are his own and does not represent the views of Providend.
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