The Investment Scientist

Harvard Endowment Bullish on US Equities

Posted on: March 26, 2011

Recently I asked my assistant John to pull up Harvard Endowment’s 13F filing for Q4 of 2010 and compare it to that for Q4 of 2009 (shown in table below).

Apparently, Harvard Endowment’s year-end position in 2010 had changed significantly from that of 2009. The way I see it, there are three significant changes:

1. At the end of 2009, Harvard Endowment was extremely bullish on emerging markets; the top 10 positions were emerging market positions. That number was reduced to 5 at the end of 2010. On top of that, the size of each emerging market position has been reduced. Take China for example; the value of shares of FXI was reduced from 365k to 203k.

2. At the end of 2010, Harvard Endowment was bullish on US equities: 5 of the top 10 positions are US stocks. They are ACL, PEB, NAL, Q, BEE. In addition, the iShares S&P 500 index ETF IVV came from nowhere to take the 13th spot.

3. At the end of 2010, Harvard Endowment also seemed to be more bullish on commodities. The S&P GSCI commodity index fund GSG rose to the 12th spot. Many oil-related stocks also have risen in their allocation weights.

It’s important not to read too much into these changes. However, if you have a knack for following smart money, there is no smarter money than Harvard and Yale Endowments.

Get my white paper: The Informed Investor: 5 Key Concepts for Financial Success.

2010 Harvard Endowment Top 15 2009 Harvard Endowment Top 15
Symbol Shares Value (X1000) Symbol Shares Value (X1000)
FXI 4,719,230 203,352 EEM 9,840,220 408,369
EWZ 2,418,687 187,206 FXI 8,645,047 365,426
ACL 341,800 55,850 EWZ 3,768,064 281,135
PEB 2,597,352 52,778 EWY 3,948,265 188,095
EWY 622,980 38,120 INP 1,772,834 113,568
NAL 2,331,429 34,925 EZA 1,700,062 95,152
AMX 524,983 30,103 RSX 2,760,452 86,071
EEM 585,558 27,884 EWW 1,651,457 80,707
Q 2,808,913 21,376 EWM 4,423,363 46,976
BEE 299,225 18,863 MVL 838,150 45,327
ECH 228,900 18,220 BNI 429,335 42,341
GSG 515,000 17,562 EWT 3,039,803 39,426
IVV 128,715 16,250 PEB 1,715,000 37,747
PBR 475,000 16,231 BAC 2,384,960 35,584
VIP 1,047,006 15,747 TEVA 503,591 28,292

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Author

Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC. He is also a regular contributor to Morningstar Advisor and Physicians Practice. To explore a long-term wealth advisory relationship, schedule a discovery meeting (phone call) with him.



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