OUR DIFFERENCE

The Individual Endowment


Our Modified Endowment Model

Institutional Grade, For
The Individual

For decades, pensions and endowment strategies leveraged by institutions such as Yale, Harvard and Stanford have enjoyed unparalleled returns by dividing assets among multiple investment categories.

This risk reducing, higher-yielding ‘Endowment Model’ has simply been out of reach for the individual investor, who had to settle into a traditional, ‘60/40 Stock & Bond,’ approach — until now.

 

— Andy Topka
The Endowment Model

Tradition Needs To Change

The mutual fund, 60/40 stock and bond approach has worked well for investors over the last 50 years. However, the landscape of financial options have shifted to offer individuals access to the alternative asset classes large institutions have utilized for decades. The Individual Endowment Model is built to take advantage of the opportunities this shift presents.

Change is Good

Embrace the New Normal

For decades, pensions like CalPERs (California Public Employees’ Retirement System) and college endowments like Yale, Harvard, Stanford and Notre Dame have diversified their portfolios beyond the limitations of traditional asset classes (stocks, bonds, cash) and achieved a greater “risk versus return” performance. The inclusion of many asset classes that perform very differently from one another is intended to steady portfolios through ALL market cycles.

 

“So what?”

De-Risking through Diversification

History has shown that by incorporating alternative asset classes, such as real estate, increases long-term returns while reducing overall market risk.

Reduced Risk Through Diversification

 20% Diversified Real Estate Income10% Diversified Real Estate IncomeEquity-Bond Portfolio
Annual Income4.0%3.8%3.4%
Annual Capital Appreciation2.8%2.8%2.9%
Annual Total Returns6.7%6.5%6.2%
Volatility7.7%7.8%8.8%
Sharpe Ratio0.870.840.71
Research has shown institutional real estate allocations may lower volatility and increase returns. Data sourced through Bloomberg Professional in 2014 for the period of time from June 1993 to June 2014.

You’re not them.

You deserve better.

Unlike the large institutions, you don’t have a multi-billion dollar portfolio and a 50 year time horizon in which to manage it. However, we believe you deserve more than a “plug and play” portfolio. Blue Oak develops a custom investment philosophy for each client by introducing the additional asset classes most appropriate for their individual goals. Our Individual Endowment Model accommodates for the liquidity, income, and tax efficiency needs of our investors.

 

Are you prepared for the New Normal?
Contact Blue Oak today to begin preparing.