Description
Book SynopsisA do-it-yourself guide to investing like the renowned Harvard and Yale endowments. The Ivy Portfolio shows step-by-step how to track and mimic the investment strategies of the highly successful Harvard and Yale endowments. Using the endowment Policy Portfolios as a guide, the authors illustrate how an investor can develop a strategic asset allocation using an ETF-based investment approach.
The Ivy Portfolio also reveals a novel method for investors to reduce their risk through a tactical asset allocation strategy to protect them from bear markets. The book will also showcase a method to follow the smart money and piggyback the top hedge funds and their stock-picking abilities. With readable, straightforward advice, The Ivy Portfolio will show investors exactly how this can be accomplishedand allow them to achieve an unparalleled level of investment success in the process.
With all of the uncertainty in the markets today, The Ivy Portfoli
Table of Contents
Preface ix
Acknowledgments xi
Part One: Constructing Your Ivy Portfolio 1
Chapter 1 The Super Endowments 3
Endowments Are Different 4
Size Matters . . . 8
. . . and So Does Performance 11
Active Management over Passive 14
Summary 16
Chapter 2 The Yale Endowment 17
History of the Endowment 18
David Swensen’s Ascent 22
Of Alphas and Betas 30
Outlining the Yale Process 33
Domestic Equity 34
Foreign Equity 35
Fixed-Income 37
Real Assets 37
Private Equity 38
Summary 39
Chapter 3 The Harvard Endowment 41
History of the Endowment 42
The Owner’s Mentality 43
Harvard’s Swensen 45
More Money, More Problems 48
How Harvard Does It 50
Summary 53
Chapter 4 Building Your Own Ivy League Portfolio 55
Do as I Do—Shadowing the Super Endowments 56
Risk-Adjusted Returns 64
Do as I Say 66
Inflation Is the Enemy 68
Creating an All-Weather Policy Portfolio through Indexing 71
Implementing Your Portfolio 74
Rebalancing Your Portfolio 77
Summary 78
Part Two: Alternatives 81
Chapter 5 Private Equity 83
What Is Private Equity? 84
Historical Returns and Benchmarking 85
How to Invest in Publicly Listed Private Equity 91
Summary 96
Chapter 6 Hedge Funds 97
A Brief Introduction to Hedge Funds 98
Fund of Funds 101
Options to Invest in Hedge Funds 113
Individual Hedge Funds 123
Fund of Funds 125
Practical Considerations 131
Summary 132
Part Three: Active Management 133
Chapter 7 Winning by Not Losing 135
Losing Hurts 136
The Quantitative System 141
Out-of-Sample Testing and Systematic Tactical Asset Allocation 151
Extensions 158
A Rotation System 159
Practical Considerations and Taxes 160
Discipline 162
The Systems versus the Endowments 165
Why It Works 166
Summary 169
Chapter 8 Following the Smart Money 171
Introduction to the 13F 172
Combining the Top Fund Managers to Create Your Own Fund of Funds 182
Summary 185
Chapter 9 Develop an Action Plan 187
Implementing Your Ivy Portfolio 188
Portfolios Discussed in The Ivy Portfolio 191
Appendix A: A Brief Review of Momentum and Trend Following 195
Appendix B: Additional Charts 199
Appendix C: Recommended Reading 207
Bibliography 211
About the Authors 218
Index 219
