Student investors outperform benchmark

Osprey Investment Group

The second class of the Osprey Investment Group generally had more favorable economic developments than did the charter class with which to achieve positive results in their managed funds.

Nevertheless, the student investors had to deal with a weaker dollar, interest rate jitters and fallout from terrorist attacks. Their investment strategy, however, paid off handsomely for the students.

During the six-month class, the fund grew from $578,013 to $649,000, representing a gross return of 12.3 percent. After management fees, the fund earned $67,460, or 11.67 percent.

The benchmark used by the class increased only 9.08 percent. The student-managed fund outperformed the benchmark by 3.2 percent, or 2.59 percent on a net basis.

The charter class had to deal with the start of the war in Iraq, declining corporate earnings, increasing business bankruptcies and prominent accounting scandals. Despite those factors, that class managed a respectable gain of 3.3 percent over the six-month period, compared with a benchmark of 5.02 percent.

Associate Professor Dr. Reinhold Lamb, who leads the class, said he was pleased.

“The financial performance of OIG is gratifying, especially since most professionally managed funds underperform their respective benchmark,” he said.

Lamb said it was even more gratifying to see the way the students approached their responsibilities.

The course, one of only five such managed investment programs in Florida, had two main objectives. The first was to immerse students in an environment to simulate a firm that manages real money. The second was an educational component in which students learn to work in teams, obtain weekly experience preparing and presenting analyses, and test strategies and methods of investing in a wide range of securities within a portfolio.

The nine students in this year’s class agreed the workload was heavy, but the rewards were great. Lisa Eakin, the group’s accountant, said it was more like taking three classes because of the required preparation work. Eakin, who is pursuing her master’s in business administration, is a UNF undergraduate and a teacher in St. Johns County.

Student Eugene Collett Jr. said he learned from the winners and the losers in the portfolio. Collett, the Latin America economist for the group, said the experience did an excellent job of re-creating the pressures fund managers face on a day-to-day basis.

Collett graduated in April with a bachelor’s of business administration in finance and banking with a concentration in investments.

The funds for the class were provided through a $500,000 donation by Jody and Layton Smith, longtime supporters of UNF and the Coggin College of Business.

This year’s students also were the first to take full advantage of the investment room, where they have access to the same type of research information professionals use.