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Wise Money: Using the Endowment Investment Approach to Minimize Volatility and Increase Control by Daniel Wildermuth

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9Real Assets

ENDOWMENTS OFTEN ALLOCATE THE LARGEST PERCENTAGE OF their portfolio other than stocks to real, tangible assets, otherwise knows as “hard assets.” In fact, if domestic and foreign market equities count as individual categories, real assets are often an endowment’s largest single asset category. Yale’s fiscal year 2010 (June 2009 release date) target allocation for real assets increased to 37 percent from the previous year’s 32 percent.1 It missed its target, only reaching 27.5 percent, but increased its target for the 2011 year to 28 percent.2 Harvard’s target was lower but still significant at 23 percent.3 Given that most investors completely lack real assets in their portfolios, the allocations of endowments strikingly differentiate ...

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