David Swensen has been called Yale’s “Money Guru”—and rightly so. As the head of Yale University’s highly successful $16 billion endowment, he has created an amazing performance record. Over the last 10-years (through Yale’s 2010 fiscal year), for example, the endowment had an annualized return of 8.9% vs. 1.5% for a portfolio allocated 70% to U.S. equities and 30% to U.S. bonds.
Mr. Swensen is also the author of two highly influential books—Pioneering Portoflio Management: An Unconventional Approach to Institutional Investment (for Institutional Investors) and Unconventional Success: A Fundamental Approach to Personal Investment (geared toward individual investors)
By anyone’s standard, Mr. Swensen is one of the most credible voices on investing and portfolio management, which is why when he lambasted the mutual fund industry in a recent New York Times op-ed called, “The Mutual Fund Merry-Go Round,” I thought that his “call to arms” needed further discussion. Continue reading