VALPARAISO | Valparaiso University is giving a $100,000 endowment to a student-managed investment fund.
Teams of students are researching investments and will make presentations to a board made up of graduates working in the field and professionals in the community. The board, which currently is being put together, will give the final say on what stock or stocks are bought.
"We're doing it in a controlled situation to make sure those university funds are safe," said finance professor Phillip Humphrey, who advises VU’s chapter of the Financial Management Association.
Humphrey said the returns from the investment will go back into the endowment and they'll continuously receive about $100,000 to invest, or the board may let the initial investment grow.
Humphrey said students will not receive a grade for the investment project.
"They are self-motivated students," he said. "It's preparing themselves. It's a great networking opportunity and something else to put on a resume. And when they go to an interview they'll get asked about the portfolio."
Junior Trent Tanber, one of the team leads, or chief analysts, for the fund, said they're looking to invest in a long-term model.
"We're not day trading," he said. "What we do is analyze solid companies that we see will most likely grow within the next two, five or 10 years and we're investing in those. It's a very long-term approach."
Tanber said he enjoys the hands-on experience.
"I can partner with groups of classmates and do something outside of the classroom that is still pertinent to our future careers," he said. "We advance our knowledge together as a whole."
VU alumnus Ken Perkins, who now works as an equity analyst at Morningstar Investment Services in greater Chicago, proposed a student-run fund while studying at VU. Paul Yox, currently an analyst at Rocaton Investment Advisors in New York, helped shepherd the idea after Perkins graduated. Both plan to be on the investment fund board.
Humphrey’s eventual hope is that the fund’s returns pay for an endowed scholarship. He also hopes the fund takes on a hierarchy that allows incoming freshmen to begin as junior analysts, then grow to become analysts, lead their own teams and eventually vie to manage the portfolio.
“It’s great experience,” he said. “Students will graduate with real experience in research and investing."