FYI: Morningstar’s John Rekenthaler shared a wild statistic about Yale’s endowment fund in a piece published yesterday:
The fund’s reputation, however, owes to its earlier accomplishments. In the 10 years from mid-2008 through mid-2018 (the latter being the date of the fund’s most recent report), Yale gained an annualized 7.4%. During that same time period, the three largest target-date 2035 mutual funds, from Vanguard, Fidelity, and T. Rowe Price, returned 7.3%, 6.7%, and 8.0%, respectively.
They underperformed the S&P 500 by close to 3% per year in this time.
I would not have predicted Joe 401k investor would have been able to keep up with one of the brightest, most sophisticated institutional investment offices in the world for a decade.
It would have been mind-boggling to suggest this would be possible when looking at the results from 2007. The trailing 10-year returns from fiscal year-end 2007 for Yale’s endowment were a staggering 17.8% per year, crushing every other fund or benchmark in its path.
Donations helped as well but these returns helped push the value of the fund from $5.8 billion to $22.5 billion in 10 years! The endowment is still massive at more than $29 billion as of fiscal year-end 2018, but the growth has obviously slowed.
Wber of peers strongly suggest that active management can be a powerful tool for institutions that commit the resources to achieve superior, risk-adjusted investment res
Regards,
Ted
http://awealthofcommonsense.com/2019/06/david-swensen-a-targetdate-fund-walk-into-a-bar/
