The $27.4 billion Harvard University Endowment has put out its annual report. The front page news is that the fund earned an 11% return in the year ended June 30, 2010 — a period during which a simple 60/40 stock/bond split would have earned it 12.6% and the Dow Jones Industrial average rose almost 19%.
The past few years have been challenging for the investment managers who came to fame running large endowments and pension plans. After losing at its low point $100 billion in value, California’s giant public pension plan manager CALPERs is in the midst of a “top-to-bottom” re-think of the asset allocation of its now $200 billion fund. (For more on that, there’s an in-depth piece in the current issue of Bloomberg Markets.)
But that hasn’t shaken Jane L. Mendillo’s faith in her asset allocation. The CEO of Harvard Management Co, which invests the endowment, reaffirmed that the fund will be continuing to move toward a portfolio that is much lighter on fixed income investments and heavier in equities, particularly foreign and emerging markets stocks. Continue reading