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Who Invests Smarter Than Harvard?

Quinnipiac University has outperformed the Ivy League with its endowment fund by a wide margin in the fiscal year that ended 2017-06-30.

Quinnipiac’s 20.9% one-year total return even managed to beat the S&P 500 ETF (SPY) by a bit more than 10%. To its chagrin, Harvard’s performance was by far the worst of the eight Ivy League funds.

How did Quinnipiac manage to beat the big boys? it allowed its endowment fund managers the freedom to pick individual stocks rather than simply ETFs, index funds or other managed products. It also passed up hiring hedge fund managers along with their hefty fees, as well as illiquid and pricey-to-manage private equity investments.

However, it should note that Quinnipiac’s endowment fund was only about $500 million while the Ivies ranged from $3.5 billion (Brown University) to $37.1 billion (Harvard). Even Warren Buffett says it’s easier to attain great results when dealing with smaller principal amounts.

Over 10 year through 2017-06-30, Qunnipiac delivered annualised of 6.1% versus 6.034% for the SPY.  The median return of all (reporting) American institutions of higher educations was a pitiful 4.38%.

How, then, can you and I be smarter than the men and women of Harvard?

To make better returns:

  1. Keep costs low (expense ratios matter)
  2. Simple, rather than complex, strategies tend to work best
  3. Maintain a 100% equity allocation through thick and thin
  4. Avoid market timing
  5. Shun cash and fixed income

Reference, Paul Price, 2018-08-05, “Who Invests Smarter Than Harvard? Quinnipiac, That’s Who”


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