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.
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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV