The October 3, 2005 issue of Fortune magazine carries a “wall street: special report” called “The Money Game” by Marcia Vickers. This details the investment strategies of David F. Swensen and Jack R. Meyer, who managed the endowments of Yale and Harvard, respectively. While most mutual funds that pick stocks underperform indices, both schools have consistently earned a much better return than the stock indices. How did they do it? Below are their allocations.



Note that Harvard’s total is 105 percent because of leverage, i.e., situations in which they’ve borrowed money to purchase investments. Conspicuously absent from these portfolios are heavy investments in American companies run by Harvard and Yale graduates. “Domestic Equity” are publicly traded stocks such as GE and Microsoft. Harvard and Yale have faith that their graduates will make a lot of money for themselves, but no faith that they will make money for their shareholders.