Evidence for the Atlas Approach
Discussions of Current Portfolio Management Practice
National Bureau of Economic Research: Investment returns of non-profit endowment funds (Dahiya, Yermack – April 2021)
US non-profit endowments in 2009-2018 achieved investment returns which were consistently worse than could have been achieved with simple index portfolios.
Center of Retirement Research: How do public pension plan returns compare to simple index investing? (Aubrey, Yin – June 2024)
Since the GFC, public pension plans have achieved lower investment returns than were available from simple stock/bond index strategies.
“If public plans cannot reasonably anticipate higher long-term returns from a complex active approach, a strong argument could be made that they should stick with a simple and transparent strategy.”
Institutional Investment Strategy and Manager Choice: A Critique (Ennis – July 2020)
Public pension and college endowment fund returns are easily predicted using simple investment indices as proxies.
Pensions and endowments, on average, did worse than they could have done at the same risk with simple index fund implementations.
Larger allocations to alternative investments were associated with lower returns.
Unexceptional Endowment Performance (Ennis – April 2024)
Implementation costs of large endowment investment programs are in the range of 2 – 3% of asset value per year.
In the years since the GFC, 2009 – 2020, college and university endowments have had returns 1.6% per year below the return of simple index portfolios.