Harvard Endowment Shows Disappointing Performance

While an improvement over the 2% loss suffered in 2016, Harvard University’s endowment returned a lackluster 8.1% this year, according to a recent article in The Wall Street Journal, “marking another disappointing year for the world’s richest school.” The article cites comments of the endowment’s new chief, N.P. Narvekar explaning that the weak returns are a “symptom of deep structural problems” and that these issues are likely to continue hurting returns. According to data provided by Cambridge Associates, college and university endowments have posted average gains of 12.7% so far this year. Harvard’s underperformance, according to Narvekar, “stemmed from losses […]

Dartmouth Endowment Returns Hit New High

For the fiscal year ended in June, Dartmouth University’s endowment fund returned a record 14.6% to $4.96 billion, after a nearly 2% decline last year. This according to a recent article in Chief Investment Officer. According to the university’s CIO Alice Ruth, “Dartmouth’s outstanding returns are a direct result of partnerships with world-class managers, which bring breadth and depth to the portfolio in service of Dartmouth’s mission.” Gains were attributed to a “broad rise in public markets, both in the US and internationally,” the article said, adding that returns were “enhanced by strong performance relative to benchmark indices across the […]

Yale’s Trouble with Timber

Yale University’s endowment fund has a chunk of timber holdings, an effort to hedge against inflation, but the holdings are raising controversy as some believe it puts large expanses of forest at risk. This according to a recent article in Bloomberg. According to the article, the university owns thousands of acres in New Hampshire, adding that one forest industry veteran complains, “They’re cutting everything, even the growing stock.” The move by many of the nation’s richer schools to increase timber holdings has been on the upswing for decades, the article says, in large part because these schools are able to […]

Yale’s Actively Managed Fund Performance Waning

The majority of the Yale University endowment fund is invested with active managers but, if you compare its returns to low-cost active strategies rather than to passive indices, “Yale’s active managers don’t look so special,” writes Bloomberg’s Nir Kaissar. In its recently released 2016 annual report, the article says the esteemed university’s endowment rebutted “fee bashers” by arguing, “The important metric is net returns, not gross fees.” Kaissar points out, however, that Yale’s attempt to substantiate high fees in the name of net returns is no longer valid.  While low-cost “smart-beta” funds haven’t been around long enough to allow a […]

Hulbert Challenges Harvard’s Lesson on Investing

After a disappointing year in which its endowment fund actually lost money, Harvard University fired half of its investment staff, writes Mark Hulbert in last week’s MarketWatch. However, he argues, “it’s not that past performance doesn’t count; what’s irrelevant is performance over the recent past. Calendar-year performance, for example, tells you next to nothing about whether your manager is a good bet for future returns. The long-term performance of Harvard’s endowment fund is strong, says Hulbert, having beaten its benchmarks by an average of 0.9 percent per year over the past ten years. Over the past 20 years, he notes, […]