Yale University 2022 Portfolio: 4 Best Investment Ideas

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In this article, we discuss the 4 best investment ideas of Yale University. If you want to read our detailed analysis of these investment ideas and the university’s investment philosophy, go directly to Yale University 2022 Portfolio: 8 Best Investment Ideas.

4. iShares MSCI EAFE ETF (NYSE:EFA)

Yale University’s Stake Value: $3,606,000

Percentage of Yale University’s 13F Portfolio: 0.67%

Price as of May 26: $69.59

iShares MSCI EAFE ETF (NYSE:EFA) provides exposure to a wide variety of stocks trading in Australia, Asia, the Far East, and Europe. Yale University initiated a position in iShares MSCI EAFE ETF (NYSE:EFA) in Q4 2020. On a sequential basis, there was no change in the University’s holding in the ETF.

In terms of sector exposure, iShares MSCI EAFE ETF (NYSE:EFA) has the highest exposure in the Financial sector as of April 28. This is closely followed by Industrials at 14.86% and Health Care at 13.39%. In terms of geographic exposure, Japanese stocks have the highest weightage at 22.17%. The global economy has come under intense pressure since the start of the conflict between Russia and Ukraine. As a result of this conflict, IMF forecasts the global economy to slow down from 6.1% in 2021 to 3.6% in 2022 and 2023. The new forecast for 2022 and 2023 is 80 basis points (bps), 20 bps lower than the projections in January.

3. iShares MSCI Japan ETF (NYSE:EWJ)

Yale University’s Stake Value: $6,900,000

Percentage of Yale University’s 13F Portfolio: 1.30%

Price as of May 27: $57.99

iShares MSCI Japan ETF (NYSE:EWJ) replicates the performance of an index comprising Japanese equities. iShares MSCI Japan ETF (NYSE:EWJ) provides access to the Japanese equity market through a single fund. The fund has medium and large-cap stocks. This reflects that Yale University is betting on Japan, which is used as a proxy to counteract the influence of China in the region.

Toyota Motor Corp, Sony Group Corp, and Keyence Group are the top three holdings of iShares MSCI Japan ETF (NYSE:EWJ), with a cumulative weightage of 10.66%. Recently, President Joe Biden revealed a US strategy called the Indo-Pacific Economic Framework. The US is joining hands with leading Asian countries. All these countries together represent 40% of global GDP.

2. Vanguard European Stock Index Fund (NYSE:VGK)

Yale University’s Stake Value: $8,408,000

Percentage of Yale University’s 13F Portfolio: 1.58%

Price as of May 27: $59.24

Vanguard European Stock Index Fund (NYSE:VGK) replicates the performance of the FTSE Developed Europe All Cap Index, which tracks the performance of equities operating in the major European market. Vanguard European Stock Index Fund (NYSE:VGK) holds equities from countries like Austria, Belgium, Denmark, Finland, France, and others.

The total net assets of the Vanguard European Stock Index Fund (NYSE:VGK) stood at $23.4 billion as of April 30, 2022. The ETF comprises 1,363 stocks, and the top 10 holdings take up 18.7% of the total net assets. The UK, France, and Switzerland are the three biggest markets that together hold 56.5% of the fund’s portfolio. Vanguard European Stock Index Fund (NYSE:VGK) has an expense ratio of 0.08%.

1. Vanguard Emerging Markets Stock Index Fund (NYSE:VWO)

Yale University’s Stake Value: $506,109,000

Percentage of Yale University’s 13F Portfolio: 95.43%

Price as of May 27: $42.58

Vanguard Emerging Markets Stock Index Fund (NYSE:VWO) takes up most of the Yale Endowment’s portfolio. The ETF replicates the performance of the FTSE Emerging Markets All Cap China A Inclusion Index and includes stocks belonging to Brazil, China, India, and Taiwan.

It is high risk and high return play for investors. China, Taiwan, and India have been given a total allocation of 67.3%. Amongst the companies, Taiwan Semiconductor Manufacturing Company Limited has the highest portfolio allocation, followed by Tencent Holdings. The top 10 stocks took up 19.80% of Vanguard Emerging Markets Stock Index Fund’s (NYSE:VWO) total holdings as of April 30.

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