Investing April 12, 2017

Endowment Model Benefits From Alternative Equity Exposures

Institutional portfolios using the endowment model grew 4.95% (on a total return basis) for the quarter ended March 31, 2017, according to the Endowment Index.

Reported by

Diversified emerging markets was the best performing overall asset class for the Endowment Index during the first quarter of 2017.

The Endowment Index, calculated by Nasdaq OMX, shows portfolios using the endowment model grew 4.95% (on a total return basis) for the quarter ended March 31, 2017, closing with an index score of 1,125.13.  The firm observes the S&P 500 index gained 6.05% for the same period. 

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“Global markets have had a broad and favorable upward bias to start 2017,” Nasdaq reports. “This was reflected in 15 of the Index’s 19 components providing a positive return for the first quarter.  While emerging markets-diversified was the single best performing overall asset class (+11.74%) for the quarter, the Index components providing the greatest overall contribution to the Index’s positive performance were private equity (+1.02%), domestic equity (+0.92%), and international developed equity (+0.70%).”

Nasdaq finds negative performers included “oil/gas, managed futures, commodities and international bonds, although the impact from these declines was minimal.”

Important to note, the index was “reconstituted and rebalanced in early February, with some minor changes to several asset classes.”

“Overall, the allocation to alternatives increased by 1% to 53% while the overall bond allocation decreased by 1% to 8%,” Nasdaq says. “Within those asset classes, venture capital increased while allocations to developed and emerging market debt, as well as distressed debt were reduced.”

There are important differences to consider between endowment model investing goals/processes as compared with Employee Retirement Income Security Act (ERISA)-governed retirement plans, yet the firm suggests investors can still learn from the example set by large, disciplined endowment portfolios. For example, endowments generally benefit from a willingness to pursue alternative asset classes and by being willing to commit capital across longer time scales. They also seem to understand that short-term risk, and even some losses, must be accepted in the name of long-term performance. Retirement plans may be limited in some circumstances from mimicking endowment portfolios by liquidity concerns, but thinking around these topics is shifting.

Nasdaq encourages readers to visit www.endowmentIndex.com to download an index fact sheet or full spreadsheets containing longer term performance information. 

Products April 12, 2017

Partnership Allows HealthPartners to Personalize Employee Wellness

A partnership with Welltok allows employees to set personalized health goals.

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HealthPartners, a non-profit health care organization, has partnered with tech firm Welltok in order to develop a health care personalization platform that would be tailored to individual participants based on factors such as their age, health status and preferences.

The platform will allow participants to establish personalized health goals, such as exercising at least 10 minutes a day, eating less salt, and managing blood sugar, in exchange for rewards. The platform also addresses financial wellness and emotional well-being by recommending resources that may help people reduce stress and save money. Furthermore, the technology is designed to dig into a participant’s health plan to make sure the individual is benefiting as much as one can. For example, the platform can direct people where to go for the most affordable care based on their plan or estimate how much it would cost them to visit the emergency room.

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“At HealthPartners, we want to help people live healthier. We know that starts with a meaningful, personalized experience,” says Joel Spoonheim, director, Health Promotion, HealthPartners. “Partnering with Welltok helps us take what we’ve already been doing to the next level. We’ll be able to easily and effectively support participants based on their specific needs or goals.”

Welltok is a health care-focused software company. HealthPartners is rolling out the new platform to select individual and small-group plan members this month. The firm will extend the platform to commercial large group markets in 2018. 

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