| If you're comparing relative returns, you need an accurate benchmark. Otherwise it's comparing apples to oranges. Would you compare returns of a cash portfolio against the S&P500? That would be ridiculous. I don't know the weights of this portfolio, however the article states "CU’s diversified portfolio" so I'd imagine it's more than the S&P. > abysmal investment performance, which could have been significantly improved by simply investing in broad market U.S. equity index funds and not being over weighted in actively managed investment and ‘alternative investments,’ Everything's easier in hindsight. This is not a question of the investment managers, but of the board of trustees of the fund. The investment managers simply execute the board's wishes, hopefully with some useful back-and-forth on how best set and do this. How the investment managers can be assessed against the goal set to them by the board. How wise the board's strategy is, is a separate question. This seems more a request of the board to only invest in the S&P500, and to do so passively. For a large fund, in my opinion, this is folly - and this is without going into an active/passive discussion: Over the long term larger companies simply don't survive all that well. Growth and change comes from newer or reborn companies, see: FAANG, and this is equally true outside of internet companies. To stay passive in the S&P ignoring smaller companies seems short-sighted, and a university endowment should look longer, decades out. Looking longer comes to investment strategy, which is essentially at a minimum matching future liabilities against assets. For this I'd suggest a composite of Russell 3000 instead of S&P500, an MSCI Global Index (this is complex - Anglo markets have a high level of market capitalisation vs. GDP, but in non-Anglo markets, take Germany, China) funds are mainly not raised via equity, and listed companies have a huge skew not representing the economy... or even something radically different. Something including forests at least. I could go on but feel this could turn into a ramble. The above should be enough. |