APPLETON, Wis., January 10, 2020 /PRNewswire/ — 2019 started off strong with most asset prices rebounding from a dismal Q4 2018. The year ended with several major indexes at or near record highs. The trade war between the U.S. and China dominated headlines and investor interest throughout most of the year until the two sides reached a ‘phase 1’ deal in December. In response to both domestic and global economies showing signs of slowing, the Federal Reserve cut the Federal Funds rate three times throughout the year. In other economic news, the U.S. unemployment rate persisted at a 50-year low, inflation remained tame and the U.S. economic expansion continued into its 11th straight year, the longest in U.S. history.
Seventeen of the Index’s nineteen components posted gains during 2019, with twelve of the gainers increasing by more than 10%. The top performers included emerging market equity- China (+35.57%), private equity (+34.80%), U.S. equity (+30.80%) and domestic real estate (+28.91%). The two components that fell posted modest declines, commodity/diversified futures (-1.65%) and managed futures (-2.73%).
Endowment Index™ 2019 Constituent Performance
|Asset Class||2019 Change (%)||Asset Class||2019 Change (%)|
|Em. Market Equity – China||35.57%||Emerging Mkt Fixed Inc||15.57%|
|Private Equity/VC||34.80%||Private Eq-Distressed Debt||13.22%|
|US Equity||30.80%||Commodity – Oil & Gas||9.55%|
|Domestic Real Estate||28.91%||Domestic Fixed Inc||8.71%|
|Commodity – Timber||22.83%||Hedge Funds||8.59%|
|Intl Developed Equity||22.67%||Intl Developed Fixed Inc||7.88%|
|Intl. Real Estate||21.26%||Liquidity-TBills||2.05%|
|Emerging Markets||17.50%||Managed Futures||-2.73%|
|Commodity – Met/Mining||16.48%|
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 Index provides an objective tool used for portfolio comparison, investment analysis, and research and benchmarking by fiduciaries, trustees, portfolio managers, consultants and advisers to endowments, foundations, trusts, defined benefit/contribution plans and individual investors.
About the Endowment Index™ calculated by Nasdaq OMX®
The Endowment Index™ uses an objective, rules-based construction methodology based upon the portfolio allocations of over 800 educational institutions managing over $615 billion in total assets as of 12/31/2018. Each of the 19 sub-indexes that currently comprise the index are investable, and contained within those sub-indexes are over 34,000 underlying securities. Real-time pricing data on the Endowment Index™ can be viewed under the symbol “ENDOW” through major quote providers, including Bloomberg as well as public websites such as Google and Yahoo Finance. The Morningstar® Index ID for the Endowment Index™ is F00000TPG6.
Definitions: Global 60-40 Stock-Bond Portfolio is an index comprised of 60% MSCI All-Country World Index + 40% Barclays Global Aggregate Bond Index.
Disclosures: Information presented is 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. Past performance is not necessarily indicative of future results. Endowment Index™ results are presented net of any underlying constituent exchange-traded fund expenses. Investments involve risk and unless otherwise stated, are not insured or guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any investment strategies discussed herein.
ETF Model Solutions, LLC is registered as an investment adviser with the SEC. ETF Model Solutions is an affiliate of Endowment Wealth Management, Inc., an SEC registered investment adviser. Registration does not imply a certain level of skill or training. You cannot invest directly in an index. Indexes do not contain fees. A copy of the Firm’s disclosure document, Form ADV Brochure Part 2, is available upon request.
The Endowment Index™ is the exclusive property of ETF Model Solutions, LLC under license from its affiliate, Endowment Wealth Management, Inc. (“EWM”). EWM has contracted with The NASDAQ OMX Group, Inc. (collectively, with its subsidiaries and affiliates, “NASDAQ OMX”) to calculate and maintain the Endowment Index™. NASDAQ OMX® shall have no liability for any errors or omissions in calculating the Endowment Index™.
NASDAQ OMX® provides either actual historical index values or back-tested histories for certain indexes. All back-tested index values for periods prior to the launch date of an index are merely indicative, and they are provided “AS IS” for informational and educational purposes only. NASDAQ OMX® makes no guarantee as to the accuracy, timeliness, completeness, or fitness for any particular purpose of or for any index values, either historical or back-tested. Nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Past performance is not indicative of future results.
Endowment Index™ historical back test was constructed based upon actual reported historical asset allocations of reporting fund managers, with those allocations held constant for 1 year. Underlying index price data based upon monthly prices.
Back-tested performance is NOT an indicator of future actual results. There are limitations inherent in hypothetical results particularly that the performance results do not represent the results of actual trading using client assets, but were achieved by means of retroactive application of a back tested model that was designed with the benefit of hindsight. The results reflect performance of a strategy not historically offered to investors and do NOT represent returns that any investor actually attained. Back-tested results are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses.
Back-tested performance is developed with the benefit of hindsight and has inherent limitations. Specifically, back-tested results do not reflect actual trading, or the effect of material economic and market factors on the decision-making process, or the skill of the adviser. Since trades have not actually been executed, results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity, and may not reflect the impact that certain economic or market factors may have had on the decision-making process. Further, back-testing allows the security selection methodology to be adjusted until past returns are maximized. Actual performance may differ significantly from back-tested performance.