It turns out that the wealth management secrets of the Ivy League aren’t what they’re cracked up to be.
Bill Abt, a former beer company executive, got 6.2% returns on a portfolio he manages for Carthage College in Kenosha, Wis.
Over the same 10-year period, Harvard’s massive $37 billion endowment returned 4.4%.
Yet Abt costs Carthage just $250,000 in salary vs. $242 million for the top managers employed by Harvard.
Mitch Tuchman, managing director of Rebalance, explains how Abt did it in his latest MarketWatch column.
Spoiler alert: Abt uses a lot of low-cost index funds from Vanguard — exactly what we do for our clients. Low cost is how Abt beat 90% of college endowments.
The difference in return over a decade is serious money for the retirement investor. A typical portfolio held in Abt’s type of investment selections would return close to double the Harvard performance over a few decades.
The key, according to Abt, is simplicity.