I like this idea—a centrally-managed fund would be a lot easier than a bunch of people separately doing their own thing. But it creates a problem where the investors/donors in the fund might have unrealistic expectations about performance and could become really unhappy if the fund underperforms the S&P for several consecutive years—which is bound to happen sometimes if the fund is aiming for low correlation. This would be particularly bad from an optics perspective. So there are pros and cons to this idea.
Good point. I think such a fund would want to be very clear that it’s not for the faint of heart and that it’s done in the spirit of trying new risky things. If that message was front and center, I expect the backlash would be less.
I like this idea—a centrally-managed fund would be a lot easier than a bunch of people separately doing their own thing. But it creates a problem where the investors/donors in the fund might have unrealistic expectations about performance and could become really unhappy if the fund underperforms the S&P for several consecutive years—which is bound to happen sometimes if the fund is aiming for low correlation. This would be particularly bad from an optics perspective. So there are pros and cons to this idea.
Good point. I think such a fund would want to be very clear that it’s not for the faint of heart and that it’s done in the spirit of trying new risky things. If that message was front and center, I expect the backlash would be less.