Harvard Endowment Goes All-In Apple, Microsoft And Google

One year ago, the Harvard University endowment made news when it disclosed in its 13F filing, that its biggest publicly traded holding was a junk bond ETF, an indication of not only the recent infatuation with high yield bonds (which this year has proven to be all too dear to those who are still long junk) amid an unprecedented scramble for any instrument with yield, but also of the creeping shift to passive investments as the school replaced some of its own traders with external money managers.

That was the case until the fourth quarter, when Harvard's latest $855MM position in HYG was dissolved, and in the fourth quarter, Harvard reported only $114.2 million in long equity exposure for 13F purposes, a steep drop from the $1.02 billion in holdings in Q3 2017.

Then late on Friday, the Harvard endowment reported its latest 13F, in which it had another surprise: of its $817 million in long positions as of March 31, 2018, the vast majority, or 72% to be precise, was just three stocks: Apple (35%), Microsoft (21%) and Alphabet (16%), with the remaining positions - mostly ETFs - accounting for just 28% of Harvard Endowment's long equity positions.

Specifically, the Harvard Management Company bought 1.69 million of AAPL. 1.85 million shares of MSFT and 129,000 of GOOGL, the latest 13F revealed.

And while these investments are just a drop in the bucket for the entire Harvard Endowment, which amounted to $37.1 billion most recently, the sheer determination by the "smartest university in the room" to have FAANG exposure, or at least AMG, at any cost, explains the relentless rise in the tech sector, which continues to hit all time highs not so much on its own fundamental merits, but because everyone - from the Swiss National Bank to Harvard - is piling their cash into just this handful of stocks.

Comments

Give Me Some Truth Mon, 05/14/2018 - 15:29 Permalink

Yet another reason the stock market CAN’T crash.

It’s by now an unwritten law/rule: All big money can invest only in stocks, plus some bonds and real estate. Note: None of these giant funds own any gold - lest they be kicked out of “the club.”

 

GoingBig Mon, 05/14/2018 - 15:42 Permalink

Of course another completely misleading article by ZH. Really WTF?  72% of their small equity position. They have a $36B dollar endowment. So basically this is between 2-3% of their entire endowment.

 

Endgame Napoleon GoingBig Mon, 05/14/2018 - 16:03 Permalink

Since they have all of these lucrative investments, and since bigwigs overseas give them $40 million donations, maybe, they should reduce tuition on debt-financed students, although it is likely that many deep-pocketed donations go to specific, thematic centers of excellence that emphasize subjects the donors’ wish to emphasize, not to fund students. 

As universities become more business-oriented, tuition is much more inflated. They charge students more, in part, due to the concentration of wealth made possible by assortative mates, keeping two high-paying jobs under fewer roofs. More parents can afford the swank tuition, driving prices up. 

When universities generate more money, students become more like customers to be catered to, resulting in executive-quality amenities for 18 year olds, grade inflation and a lesssning of respect for degrees of all kinds among the lesser mortals.

People used to regard college as a rigorous set of unpaid, competitive hurdles for ragtag students to jump over, not as a luxury experience, complete with copious trips abroad and campus amenities fit for a CEO. Then again, the absenteeism-friendly jobs of dual-high-earner parents are a lot like that, so this might be apt preparation.

 

 

In reply to by GoingBig

Endgame Napoleon venturen Mon, 05/14/2018 - 16:15 Permalink

What is the alternative to the Made-in-China phone by the American-owned company? 

Should we buy a Made-in-China phone by Samsung, a Korean-owned company? 

Most arty people are not going to abandon Apple unless a Made-in-America product emerges with features that supersede Apple’s aesthetics and ease-of-use virtues.

The iPhone is one of a small list of high-quality Made-in-China imports.

Maybe, Elon Musk should abandon cars, challenging the notion that no one can compete in mobile hardware anymore, making a more encrypted, NSA-proof, Made-in-America Fourth Amendment Smartphone with a skinny pen to make the art and productivity apps more useful. 

ZHedgers will never upvote this.

In reply to by venturen

The Count Mon, 05/14/2018 - 16:07 Permalink

Harvard is in the endowment business, education is just an afterthought.

I personally know one case where the appropriate size 'donation' got a kid into this school without being qualified. How much you may ask? A couple million.

TacticalTrading Mon, 05/14/2018 - 17:02 Permalink

They will never sell, and since AAPL and Warren are going to buy all the AAPL stock....

AAPL to the Moooonnnnnn!

 

The coming AAPL rally is going to make Bitcoin look boring

What could possibly go wrong? 

Inventory up 174%, Yea, who cares.... iPhone X to the Moon!

And, when AAPL is doing buying AAPL and going private because they have that much excess cash, they are going to buy Tesla, 
So Tesla to the Moon to

Remember, You heard it here first.... 

alter_ Mon, 05/14/2018 - 20:14 Permalink

Private college funds should all be confiscated and used to pay back the taxpayers for money students defaulted on or were forgiven. The colleges caused the debt crisis by overcharging students. They need to pay it back. Starting with rich overpriced schools that penalize conservative viewpoints.