Bloomberg article on Ivy league Hedge funds under performing

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BeachPerson
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Bloomberg article on Ivy league Hedge funds under performing

Post by BeachPerson » Wed Oct 09, 2019 5:26 pm

Ivy League Underperforming

What the Bogleheads know that the Ivy Leagues do not, just go with the index funds!!!
This underperformance is consistent with the record of the past decade, with none of the Ivy endowments beating a 60-40 portfolio in the 2008-2018 period, though a couple did come close.
David | | From Jack Brennan's "Straight Talk on Investing", page 23 "Living below your means is the ultimate financial strategy"

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TomatoTomahto
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Re: Bloomberg article on Ivy league Hedge funds under performing

Post by TomatoTomahto » Sun Oct 13, 2019 1:54 pm

Endowments have very different time horizons than you or me. I didn’t read the article. David Swenson goes from hero to zero and back; it has nothing to do with me or my Investing.
Okay, I get it; I won't be political or controversial. The Earth is flat.

targetconfusion
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Re: Bloomberg article on Ivy league Hedge funds under performing

Post by targetconfusion » Sun Oct 13, 2019 3:57 pm

TomatoTomahto wrote:
Sun Oct 13, 2019 1:54 pm
Endowments have very different time horizons than you or me.
But isn't that even more embarrassing? Usually longer horizon means more risk tolerance and correspondingly more opportunity to beat the humble 60/40.

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TomatoTomahto
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Re: Bloomberg article on Ivy league Hedge funds under performing

Post by TomatoTomahto » Sun Oct 13, 2019 4:04 pm

targetconfusion wrote:
Sun Oct 13, 2019 3:57 pm
TomatoTomahto wrote:
Sun Oct 13, 2019 1:54 pm
Endowments have very different time horizons than you or me.
But isn't that even more embarrassing? Usually longer horizon means more risk tolerance and correspondingly more opportunity to beat the humble 60/40.
Not if you want it to last “in perpetuity.” That’s when you invest in forests and things like that, which you and I would probably not do.
Okay, I get it; I won't be political or controversial. The Earth is flat.

afan
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Re: Bloomberg article on Ivy league Hedge funds under performing

Post by afan » Mon Oct 14, 2019 5:03 pm

I did not see anything about Ivy League hedge funds. Only about endowments and their investments. Since all the Ivies are nonprofits, I don't know what an "Ivy League hedge fund" would be.

The usual response to comparisons between a 60/40 portfolio and endowments is that nonprofits value the diversification. They hope not to be at the mercy of a drop in stocks. By investing in a wider variety of things they hope to smooth out the ride. I don't see much analysis of whether they succeed. Are endowment values less volatile than those of a 60 40 portfolio? Do returns from alternative investments zig when the markets zag?

I find it interesting that some active managers like to tout the value of this sort of diversification but do not invest in the same things. Here on BH we have active managers who in the past advocated commodities funds, then a set of AQR active funds. Now pitching reinsurance and lending funds. Not clear whether endowments use any of these.

University endowments definitely have unique risk structures. They have high fixed costs for their physical plants and large base of highly paid employees. They are obligated to spend freely to maintain their positions in the academic world. They have an odd combination of steady revenue from tuition and fees and highly variable income from gifts. Those gifts, at least the big ones, depend a lot on the health of the economy and recent returns to the stock market. Given this, it makes sense for the endowments to try to diversify beyond financial markets.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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firebirdparts
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Re: Bloomberg article on Ivy league Hedge funds under performing

Post by firebirdparts » Tue Oct 15, 2019 12:21 pm

There were earlier articles about this info and I think at least one thread about it. Not much you can say. Classic case of outsmarting yourself when presented with easy pickings.
A fool and your money are soon partners

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