Veriti In the News: Coverage of Dennis Hammond’s Upcoming Journal of Investing Article

Larry Swedroe, chief research officer for Buckingham Strategic Wealth and Buckingham Strategic Partners, profiles Dennis Hammond’s upcoming JOI article in The Enduring Futility of the Endowment Model.

According to Swedroe, investors have no chance of adding alpha by pursuing an “endowment” model. New research shows that even the most sophisticated institutions do worse when they increase exposure to alternative asset classes, and that investors would be better served with a passive, 60/40 allocation.

Summarizing Hammond’s findings, Swedroe points out that “while the largest cohort of endowments basically managed to match the return of the benchmark over the full period, it underperformed by 1.5% over the most recent 10-year period. The result could be reflective of the increasing difficulty managers have experienced due to the ‘Incredible Shrinking Alpha.’ ”

Read more of Swedroe’s coverage here.

Credit: Advisor Perspectives, July 23, 2020