The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By James Brumley

NEW YORK ( StreetAuthority) -- Almost everyone knows Harvard University is one of the premier names in the world of college academia. What most of the world may not realize, however, is that the geniuses managing its $27.6 billion endowment have become the envy of other Wall Street fund managers, and for the right reason -- namely, achieving big and reliable returns with a long-term holding strategy.

In the past two decades, the Harvard endowment has averaged annual returns in the 15% to 20% range, a la Warren Buffett. Those numbers easily top the domestic large-cap market (the S&P 500), which has been neither reliable nor all that productive during that time. In fact, the market's average return for the last 10 years is teetering on being negative.

So what separates Harvard's gurus from the rest of us? It's probably not what you think.

Method to the Madness

On average, only about 12% of Harvard's endowment is committed to U.S. stocks. Between 20% and 25% of these funds -- roughly $ 6 billion -- are usually invested in foreign equities. About 15% of the portfolio is devoted to fixed income, with half being committed to foreign bonds. About a third of the endowment is split between private equity and hedge-fund holdings, while the last fourth of the endowment is split fairly evenly between real estate and commodities.

It's a far cry from the typical portfolio for most investors, which averages about 97% domestic stocks. And, as far as international exposure is concerned, Harvard's allocation is leaps and bounds beyond Standard & Poor's chief analyst Sam Stovall's current recommendation of 15%. Before scoffing though, don't forget these pros have a 20-year track record of seriously strong performance. They clearly know something that the rest of the pros don't.

(Still) Putting Their Money Where Their Mouth Is

As the familiar disclaimer warns, past performance is no guarantee of future results. On the other hand, considering the endowment's managers have repeatedly proven their foreign stock-picking prowess, following their lead could be a good strategy.

As for their favorite international picks, four are looking really smart right now.

1. Alcon (ACL)

The fund's biggest single-stock holding is also one of its newest -- Switzerland-based Alcon. The company's eye-care products are sold worldwide, making it the biggest eye-care company on the planet. Priced at 22.8 times trailing earnings, Alcon isn't exactly a value play. Sometimes though, you have to pay a premium for something of value.

If you liked this article you might like

First Week Of February 20th Options Trading For IShares MSCI Pacific Ex-Japan Index Fund (EPP)

Noteworthy ETF Outflows: EPP

IShares MSCI Pacific Ex Japan ETF Experiences Big Outflow

Why You Should Be Looking 'Down Under' for ETF Investment Buys

Cramer Quick Take: Talking MLPs