Small and Mid-sized Foundations Question Endowment Model

Some small and mid-sized endowments and foundations are questioning the value of an “Endowment Model” portfolio that includes uncorrelated alternatives instead of a blind 60/40 portfolio of stocks and bonds allocation.  The model has been criticized for being too complex and staff heavy to manage. However, a new study from institutional consulting firm NEPC shows the majority have not forgotten the lessons of 2008.

While a traditional correlation to stocks that ignores hedging during potential periods of economic uncertainty, a strategy that has worked well only after 2008, might not work well in the future, the report says.

Endowment...

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