APPLETON, Wis., Jan. 14, 2021 /PRNewswire/ -- The Endowment Index® calculated by Nasdaq OMX® (Symbol: ENDOW) closed at 1,517.54 to end 2020, the second consecutive year that the Index closed at a record. The Index gained 10.14% in 2020 (on a total return basis), which compares to a Global 60-40 portfolio which increased 13.77% for the same period. For the fourth quarter, the Index gained 13.91% compared to a 10.08% increase for the Global 60-40 Portfolio.
The Index got off to a rocky start in 2020 as fears of a widespread global health crisis began to build during Q1. The global asset selloff pushed the Index to a Covid-crisis closing low of 987.70 on March 23. Governments around the world unleashed an unprecedented response to the health crisis, including severe economic shutdowns and travel restrictions, massive monetary and fiscal stimulus, and a furious R&D effort to develop a vaccine. These efforts restored investor confidence and global markets began a rebound. The Index gained 8.00% in April and ultimately 53.64% from its March 23 closing low.
2020 Endowment Index Constituent Asset Class Performance
Em. Market Equity - China
Private Eq-Distressed Debt
Commodity – Met/Mining
Emerging Mkt Fixed Inc
Intl Developed Fixed Inc
Commodity -Natural Resources
Commodity - Timber
Liquidity - TBills
Commodity – Pvt. Agriculture
Domestic Real Estate
Intl. Real Estate
Intl Developed Equity
Publicly Traded MLP's
Domestic Fixed Inc.
Commodity – Oil & Gas
Nineteen of the Index's twenty-four components posted gains for 2020, with ten posting double digit gains. The top four performing components of the Index for 2020 were emerging market equity – China (+37.42%), metals & mining (+26.97), gold (+23.86) and U.S. equity (+20.95%). Certain components of the real asset portion of the portfolio underperformed, with publicly traded MLP's and oil & gas as the two laggards, posting losses of -32.39% and -32.75%, respectively.
The Endowment Index represents the investable opportunity for managers of portfolios utilizing the Endowment Investment Philosophy or who otherwise incorporate alternative investments within a comprehensive asset allocation. The Endowment Index measures performance for a multi-asset, globally-diversified, three-dimensional portfolio that includes Global Equity, Global Fixed Income, and Alternative Investments (like Private Equity, Hedge Funds and Real Assets) The Index applies an objective, rules based construction methodology based upon portfolio allocation data obtained from over 770 educational institutions that collectively manage over $630 billion as of 6/30/19. Each of the 24 sub-indexes that currently comprise the Index are investable and contained within those sub-indexes are over 44,000 underlying securities.
Visit EndowmentIndex.com to download longer term index price and performance data.
ETF Model Solutions, LLC serves its clients as an ETF strategist, designing and managing ETF-based investment solutions for advisers, institutions, retirement plans and individual investors based upon the Endowment Investment Philosophy®. The Firm offers ETF-based diversified target-risk models, and asset class models for use by investment advisers and retirement plans. ETF Model Solutions, LLC also provides digital investment services to individual investors through the website, www.MyRoboAdviser.com.
Disclosure: Information presented for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies, nor shall it be construed to be the provision of investment advice. You cannot invest directly in an index. Indexes do not contain fees. Past performance is not necessarily indicative of future results. Investments involve risk and unless otherwise stated, are not insured or guaranteed. Performance information provided is net of any underlying exchange-traded fund expenses but does not include any other fees or expenses. ETF Model Solutions, LLC is registered as an investment adviser with the SEC. Registration does not imply any level of skill or training, nor does it imply endorsement by the SEC or other securities regulatory authority. A copy of the Firm's disclosure document, Form ADV Brochure Part 2, is available upon request. Global 60/40 portfolio is comprised of 60% MSCI All-Country World Index + 40% Barclays Global Aggregate Bond Index.