 |
 |
 |
Summer 2004 |
 |
Student-Managed Portfolio Outperforms Its BenchmarkContinuing a trend established with the 2000 launch of the Eller College Finance Department’s innovative course in investment management, Eller student portfolio managers have once again outperformed their industry reference point. In fourth quarter 2003 they returned 4.24% to investors while their benchmark—60% S&P 500 Index and 40% Lehman Brothers Fixed Income Indexed Fund—delivered 2.02%. Since the FIN 423/523 Applied Investment Management course was introduced four years ago, Eller students have achieved an annualized return of 6.16% compared to the benchmark’s 1.81%. The student managers’ higher return for 2003 was also generated with lower risk than the industry benchmark, as measured by standard deviation. The course was initially seeded with $600,000 made available by the Finance Department and the UA Foundation. Working in teams directed by Professors Don Seeley and Sharon Garrison, students develop recommendations for percentage allocations between fixed income and equity securities and for specific investments within each. Their recommendations are presented to a Portfolio Advisory Committee of industry portfolio managers, the Finance department head, and UA’s investment officer. As of December 31, 2003 the portfolio was valued at $711,000. Don Seeley, current chairman of the Finance Department’s advisory board, joined Eller to direct the investment management project after a thirty-five year career holding senior executive finance positions in the manufacturing, airlines, consulting and marketing communications industries. Sharon Garrison, also a member of the advisory board and a former small business owner, has taught corporate finance for twenty plus years and been an Eller faculty member since 1999. Together they reinforce the finance and investment concepts of traditional business education while giving students a real-world ride in the risks and returns of portfolio management.
|
|
|
|
