There's no two ways about it -- endowment funds love exchange-traded funds. Of the 10 biggest position value increases last quarter, four names were ETFs. If that seems like a surprisingly high number of funds for these funds to own, you've got to keep in mind the strategy that these endowment funds are famous for. Many endowments use global tactical asset allocation strategies to manage their money, so ETFs actually provide some of the easiest exposure to the markets that their models dictate they follow. The biggest ETF position among endowment funds right now is the Vanguard MSCI Emerging Markets ETF ( VWO), and fund managers increased their stakes in this fund by around 30% last quarter. This is the second straight quarter that endowments have poured money into this fund. Put simply, VWO carries exposure to China, Brazil, South Korea, Taiwan, and a number of other emerging economies. Because these countries are projected to sustain high growth levels over the next few years, they make attractive alternatives to the drama-filled economic stories being told in the Western world. And because manufacturing tends to be a bigger component of emerging economies, this fund has heavier exposure to physical good production rather than service-based businesses. But that's not the justification that managers are going for to buy this fund. Instead, their models are identifying major technical strength in VWO, which sends a buy signal to endowment funds. Because tactical asset allocation models typically shoot for low turnover, it's a strategy that coattail investors actually have a chance at following -- even if you don't have access to the proprietary models that the endowment funds are using.