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The underperformance of Ivy League endowments for the year ended June 30 is another illustration...

The underperformance of Ivy League endowments for the year ended June 30 is another illustration of how the "smart" money is down on U.S. stocks. These funds have benefited over the past 20 years by shifting assets into alternative investments - Yale now has a U.S. equity allocation of 6% vs. a 35% weighting in P-E. It might be time to return to the simple 60/40 U.S. stocks and bonds model, but who's going to pay 2 and 20 for that?
Comments (5)
  • Uncle Pie
    , contributor
    Comments (3022) | Send Message
     
    It's not quite accurate to say that Yale's exposure to equities is only 6%; that would be the direct exposure, but given that much of the endowment is in hedge funds, and the hedge funds take highly leveraged exposure to equities, the effective equity exposure is likely to be orders of magnitude higher than 6%. It may well be over 100% when you take the leverage into account.
    29 Sep 2012, 11:57 AM Reply Like
  • untrusting investor
    , contributor
    Comments (9951) | Send Message
     
    UP,
    Exactly right. Impossible to say what the allocation in endowment funds really is.
    29 Sep 2012, 11:19 PM Reply Like
  • tsra1983
    , contributor
    Comments (40) | Send Message
     
    Every sell side bozo is pushing "Alternative Investment" vehicles on anyone with over $500k in assets right now. The "smart money" are likely liquidating their positions and creating this sell side momentum.

     

    PE has been very active since the turn of the century, and even more so since '08. I think they're going to be offloading assets in the next few years. Assets that are going to end up on the balance sheets of publicly traded companies.
    29 Sep 2012, 04:44 PM Reply Like
  • whidbey
    , contributor
    Comments (3391) | Send Message
     
    Educational investors seem to be uncomfortable with their current investments for good reason. This is because of not just earnings, but the shifts that will occur in tuition loans to entering students - the loans will be more expensive and harder to get . The professional schools are already losing enrollment at many schools. The whole cost structure of higher education is changing rapidly. Smaller classes and higher tuition?
    30 Sep 2012, 12:38 PM Reply Like
  • reidmc
    , contributor
    Comments (3) | Send Message
     
    Hindsight is 20-20. Likely time to stay with alternative investments. The last three years were the time to be 60/40 traditional.
    30 Sep 2012, 03:20 PM Reply Like
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