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.
Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.
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Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Fee-only Wealth Advisory firm Providend.
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His investment broker of choice is Interactive Brokers, which allows him to invest in securities from different exchanges all over the world, at very low commission rates, without custodian fees, near spot currency rates.
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