Penn State Behrend students are among the thousands nationwide learning about the stock market by buying and selling stocks in class.
But unlike most of these students, students in charge of the Intrieri Family Student-Managed Fund at the Black School of Business in Behrend use real money to buy real stocks.
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And they beat the results of some of the best money managers in the nation.
The fund was launched in 2012 with a gift of US $ 100,000 from Vincent Intrieri, a 1984 graduate of Behrend and founder and CEO of VDA Capital Management LLC.
Since then, the fund has grown to nearly $ 1.1 million, including a return of 18.3% so far this year.
Dow Jones figures show that for the past 11 consecutive years, 60% or more of all equity fund managers have lagged the Standard and Poor 500, which is viewed as a reflection of the overall stock market.
The Intrieri fund outperformed the S&P this year by more than 7 percentage points.
Like other students over the years, seniors Evan Briant and Michael Tejchman have had something to do with this growth.
The two friends, who attended the same high school in Pittsburgh and became roommates in Behrend, served as co-chairs of the fund and led a group of junior and lead employees who manage an ever-changing assortment of 33 stocks.
Tejchman, who will join the internal audit department of a Pittsburgh bank after graduating on Saturday, said he was proud of what the student-run mutual fund has achieved.
Briant, who will be starting out in the tax department of a financial firm in Pittsburgh, said the two are part of a team that reviews stocks every week for potential buy and sell.
“It’s a great exercise to learn a lot more about the things we learned in investing classes,” he said.
While up to 50 students participate in the fund per semester, additional responsibility comes with a leadership role, Tejchman said.
“When the leads do their pitches, you get more thinking about whether or not you will buy this stock. The assumption is that they did their research,” he said.
But because it’s real money, nobody takes anything for granted.
Tejchman said his most memorable stock buyer was one that didn’t happen. He had done the research and recommended buying an India-based bank card company.
However, another student analyst shared potentially devastating news. The company was faced with a potentially damaging class action lawsuit.
“Everyone has your back,” he said.
Briant said he enjoyed building the value of a mutual fund that will eventually be used to provide scholarships for students. He also appreciated that the fund also made him more attractive to employers.
Most of all, though, he enjoyed the process.
“I don’t play sports,” he said. “It’s been fun to work with a great group of people again.”
A dividend for students
Tim Krause, associate professor of finance and director of the fund since 2014, said there were always plans to use the fund to award scholarships to business school students.
Now that the fund is worth more than $ 1 million, plans for it are likely to move forward.
Krause said he helps students set well-researched price targets for which they will sell shares in the fund, as well as price targets for stocks they want to buy.
The mechanics of the process are facilitated by the use of a dozen professional Bloomberg terminals that allow students to monitor and analyze financial market data in real time.
But the loan for the portfolio belongs to the students, he said.
“I usually don’t put my thumb on the scales very often. In the end, I don’t have the power to override them,” said Krause.
Lessons in the real world
Krause said not only is the investment course his favorite course, but he believes it is the most practical and helpful for students.
“We do some (market) simulations in other courses and students are usually in the house,” said Krause. “They tend to get big or busy, and they don’t care how the fund goes.”
The money wasn’t theirs, but Brian and Tejchman said they’d never forget it was real.
Greg Filbeck, director of the Black School of Business in Behrend, sees value in this.
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“I think when students have the opportunity to work with real money, the decisions become real. I think it becomes a much more deliberate process. It instills a greater sense of responsibility,” he said.
Soon, he said, the fund is expected to fund around $ 80,000 in grants each year.
Filbeck said the fund’s experience helps students stand out in search of employment.
“This is one of the crown jewels of what is known as the open laboratory process,” he said. “We call it business school learning.”
Contact Jim Martin at 814-870-1668 or email@example.com. Follow him on Twitter @ETNMartin.
Big winners: Five of the top returns for the Intrieri Family Student-Managed Fund in Penn State Behrend.
The Tri Point Group has existed for several years. Further investments were made last year.
• • Anthem: Plus 89.9%
• • Tri Point Group: Plus 64.4%
• •Cisco Systems: Plus 37.0%
• • To the: Plus 28.5%
• •Cigna: Plus 24.3%