Omer regev
08/07/2016
Harvard and Yale manage Endowment Funds of $38 billion and $26 billion respectively. These investors have achieved extraordinary returns over the past 20 years, outstripping returns from the equity markets and standard balanced funds.
Frontier has been at the forefront of research into the large and successful University Endowment funds for the past 10 years. As part of our research, we update our study on Harvard and Yale each year and this year, we are excited to report that we now have 20 years of data on these outstanding investors.
This research paper seeks to shed light on a number of important questions surrounding the importance of asset allocation, alternative asset classes and active vs passive investing. The results continue to demonstrate that there is great value in examining and emulating the asset allocation strategy of these successful investors.
In particular, these investors have always maintained a low allocation to Fixed Income and we believe that now more than ever, building a diversified portfolio with low exposure to Fixed Income is important as Fixed Income as an asset class is unlikely to deliver the returns generated over the past 20 years.
The Frontier MAP Funds take inspiration from Harvard and Yale when reviewing the asset allocation of the funds and the MAP Funds have a similar style asset allocation with a small allocation to Fixed Income and a significant allocation to Alternative asset classes including Absolute Return strategies.
We believe that this type of asset allocation will be important for clients to consider as interest rates rise and returns from Fixed Income are muted.
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