Given the present economic conditions, it is no surprise that many Harvard Endowment fans( mainly other pensions and endowment funds) have wondered how the endowment has fared in the current market environments. The answer: +8.6 % for the fiscal year ending June 30, 2008. During the same time period, the S&P 500 was down 13.1%.
One reason for why Harvard Endowment has been able to post positive gains in the midst of a declining stock market has to due with their steady decrease in allocation towards the equities sector and their increase in allocation towards the real assets, commodities, and absolute return sectors. (View the endowment’s investment policy)
From The New York Times:
“Harvard said that its domestic equity holdings, which account for 12 percent of the portfolio, lost money but outperformed its benchmark, while its foreign equity holdings also fell, declining 12.1 percent, a percentage point more than the benchmark.
Its emerging market holdings and private equities holdings exceeded their benchmarks by about 3 percent. Harvard also beat its benchmarks for domestic, foreign and inflation-indexed bonds. That sector accounted for 15 percent of the portfolio and in each case outperformed the indexes from 2.8 percent to 4 percent.
Its real assets – liquid commodities, timber and land and real estate – beat the benchmarks by nearly 3 percent.
The disappointments were absolute return funds, or hedge funds, which rose 0.1 percent (the benchmark was a 1.8 percent increase) and the high-yield sector, where Harvard’s holdings fell 8.3 percent while the index rose 0.7 percent. About 1 percent of Harvard’s total portfolio is allocated to high yield. ” Read Full Article
Balarie Capital Management works with Pensions, Endowments, and Insitiutional Investors regarding their commodities and managed futures investments. Please contact us or access our managed futures database for more information.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THERE IS SIGNIFICANT RISK OF LOSS WHEN TRADING FUTURES AND OPTIONS. ALWAYS REVIEW A DISCLOSURE DOCUMENT BEFORE INVESTING IN ANY MANAGED FUTURES PROGRAM.