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.
Alcon has two great things going for it -- a great return on equity (ROE) and impressive free cash flow. Alcon's ROE is an industry-leading 33.6%, while last year's free cash flow was an impressive $2.93 per share.
In this case, Alcon and America Movil are both apt to make solid long-term additions to buy-and-hold portfolios and can be confidently copied by investors. The two country-based ETFs, on the other hand, are a needlessly chicken-esque decision for the endowment's managers. To be clear, both emerging markets have a great deal to offer. The problem is, their respective funds only offer a watered-down version of that potential. Active investors are better off taking the bigger country-themed hint from Harvard's endowment and then shopping for that locale's better individual stocks. You could even start by simply looking at the top holdings of the two ETFs. (For my favorite picks in Brazil, check out my recent article.) This article originally appeared on StreetAuthority. To read more articles from James Brumley on StreetAuthority, you can visit this link . Disclosure: At the time of publication, James Brumley owned no positions in the stocks mentioned.