This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Follow Swensen's Yale Endowment Fund

David Swensen has gained great fame in the last few years as the head of the Yale Endowment Fund (you can click here for more about the fund's performance).

As the exchange-traded vehicle industry has evolved over the last few years, it has become easier to emulate the fund.

Here's how it's possible to use things like ETFs and mutual funds to create your own endowment.

Click here for larger image.
(Source: Bespoke Investment Group)

The basic goal behind this sort of mix is strong returns, low volatility and a low correlation to the U.S. stock market. It's easy to see how the right people implementing a portfolio with these tools could accomplish that goal.

Obviously domestic equities, foreign equities, fixed income and cash are all readily available.

Absolute Return

There have been many products added to the absolute return in the last few years. Some that I think are worth exploring;

  • Rydex Managed Futures Strategy (RYMFX), which I wrote about here and here.

  • Permanent Portfolio (PRPFX)

There are also countless mutual funds that use long/short strategies. Some of these funds struggled badly last summer, just as the market's volatility was ramping up. A couple that did relatively well were:

  • JP Morgan Multi Cap Market Neutral Fund (OGNIX); don't let the 48-cent dividend in December throw you.
  • Merger Fund (MERFX), which I blogged about here.

One last idea to mention for absolute return would be creating your own pairs trade involving sector ETFs, which I wrote about in detail here and here.

Private Equity

Private equity is tricky. There are plenty of exchange-traded vehicles, but just about every one that I found is down a lot more than the market. Most of them have very high yields, but they had high yields before they fell that didn't protect them.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
MVC $9.59 0.00%
TIP $113.67 0.00%
WIP $55.19 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs