The Birmingham News
UAB Students Ride the Market
Monday, October 06, 2008
News Staff Writer
Laura Bordelon is probably watching the current economic situation more closely than most of her fellow students at the University of Alabama at Birmingham.
Bordelon is the chief investment officer for the Green and Gold Fund, a $400,000 investment portfolio managed entirely by students from UAB's business school. Despite the turmoil, they're doing pretty well, says the senior, who's double-majoring in accounting and finance.
"We're beating the market, that's for sure," said Bordelon, who said the fund's portfolio is down 4.63 percent in August from the previous year, outperforming the Standard and Poor's 500 Index, which was down 11.39 percent for the same period. "We're looking for good opportunities right now because so many stocks are underpriced. We're looking to get into things when the market is down."
The Green and Gold Fund managers were recognized this year at a national competition for university funds called Redefining Investment Strategy Education, where they finished first for the growth-style portfolio category in the undergraduate division.
The group consists of Bordelon, a team of eight portfolio managers responsible for different sectors of the market, an economist, a chief accounting officer and a marketing director. All are either undergraduates or MBA candidates. The team meets once a week to debate and vote on investment choices.
"This is as real a portfolio as you can find in an investment bank or any other place," said Adil Faizee, a senior and the portfolio manager for the alternative and international sectors, which includes real estate and commodities.
The fund, which is meant to generate cash for scholarships, started in 2005 with $300,000, most of it from the UAB Educational Foundation, and a goal of reaching $500,000.
The students are learning that might be a tricky prospect.
"The stocks are just going insane," said Stephen Garrett, a senior who's in charge of the energy and utilities sector. "Fundamentals don't mean anything. Everything's based on emotions."
Not so for the students, who say they're sticking to their long-term strategy and basing all their decisions on in-depth research. For instance, Garrett said he took the time to go through all 400-plus pages of the federal economic bailout plan to be sure he'd understand it.
Most figure they spend as much as eight hours a week researching their sectors. Some do other trading and investing, either for themselves or professionally, on the side.
They also get a lot of requests for advice.
"Your grandmother calls you, your parents ask you if they should pull out, and really you have to take it on a case-by-case basis with people's own profiles as well as their risk," said Merritt Black, a senior who last month started his own capital management and currency trading firm. "For a young generation like ourselves or people at least 10 years away from retirement, this is wonderful opportunity. Everything's on sale."
They're a little less confident about their own job prospects immediately upon graduating, since there are thousands of financial employees in New York looking for jobs right now.
They figure what they've learned working for the fund will give them an edge. And even if they decide to go another direction, as Bordelon said she might consider in this volatile market, they're having a good time.
"It's such a great hands-on, real-world experience," she said. "It's a lot of fun."
CNBC News Features the Green and Gold Fund