This Day On The Street
Continue to site
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

Ivy League Investing With the Yale Endowment

BALTIMORE ( Stockpickr) -- While the Ivy League may be known for churning out some of Wall Street's most well-respected investors, it may actually be these storied universities' endowments that deserve the most respect. After all, the endowment funds at some of the country's most prestigious schools have boasted some incredible returns over the last few decades -- and few have gained as much attention in the process as Yale University's $16.7 billion fund.

Headed by Chief Investment Officer David Swensen since 1985, Yale's endowment ranks as the country's second-largest academic endowment in the world (trailing only Harvard's mammoth coffers). But Yale's notoriety ranks first, thanks in part to Swensen's strategy for managing endowment funds.

>>Also: Fairholme Makes Big Bets on Financial Stocks

Swensen's approach to endowment investing embraces alternative investments not typically approached by Main Street investors. Liquid investments, he opines, leave returns on the table. To counter that, his funds seek major holdings in illiquid alternatives such as real assets, private equity and workouts (called absolute return investments) designed to tap market inefficiencies. Only a meager 7.5% of Yale's endowment is invested in domestic stocks.

Unfortunately, that strategy failed to impress in 2008 when capital fled illiquid investments and real assets in favor of accessible "quality" holdings. All told, the fiscal year ended June 30, 2009, resulted in a 24.6% loss -- Yale's largest ever.

>>Also: Ken Fisher: Debunking Wall Street's Myths

In the year since, the fund has bounced back, with an 8.9% return on assets last year. While the endowment has continued its practice of avoiding overreliance on domestic equities, you shouldn't underestimate the team's ability to pick stocks; the endowment's stock portfolio beat the broad market by 4.7% last year.

With that, here's a look at some of Yale's holdings per its latest quarterly filing.
1 of 4

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
Only $9.95
14-Days Free

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
XTXI $0.00 0.00%
XTEX $17.60 0.57%
BIOD $0.39 -5.10%
WWW $18.93 -0.89%
AAPL $94.19 -1.04%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs