Invested in Their Future

To the untutored, the ups and downs of the stock market seem unfathomable. But not to Moravian's student-run Amrhein Investment Club.

The last time we wrote about the club, it had seen its $20,000 in seed money—a gift from trustee Irving S. Amrhein in 1962—top $1 million. More recently, the club proved it could hold its own in bad times as well as good against other student-run portfolio management groups, when it placed third and fifth in the second annual Redefining Investment Strategy Education (RISE) symposium February 21-22 at the Unversity of Dayton (Ohio).

The conference brought together student-run investment funds from 61 colleges and universities in the United States and Canada. Participants ranged from students at small liberal arts colleges to graduate business programs at major universities. The event included a day of discussion with investment professionals, including a satellite address by Maria Bartiromo of CNBC's Squawk Box, and competitions among the various funds.

"I had intended to bring the officers so they could learn more about how other funds are managed," said faculty adviser Linda Ravelle, associate professor of economics and business. "I entered them into the competition without thinking that we would get very far, since our returns were not that large."

From November 2000 to November 2001, she said, the club's Income Fund earned 2.41% and the Balanced Fund 2.38%. But because markets were down over the period—the Dow Jones Industrial Average fell an overall 4.21%, and other markets lost even more—the Amrhein Club's returns were surprisingly healthy.

For the competition, five funds were chosen in each of three investment categories. Ravelle was "pleasantly surprised" when two of Amrhein's four funds qualified as semi-finalists. "The students were very nervous once they realized the caliber of school they were up against, but they really did a great job in their presentations," Ravelle said.

In the value category, Moravian placed third after Stetson University in DeLand, Fla., which had a 20.4% return, and the University of Dayton. "We were happy to earn third place because both schools have well-funded, professionally supported portfolio-management programs," Ravelle said. Many in the competition were students who manage portfolios as part of a class, whereas Moravian students ("and their advisor," she added) do all their work on a volunteer basis in their spare time.

In the growth category, students in the M.B.A. program at Purdue University placed first, followed by Millsaps College, Jackson, Miss.; Northern Arizona University; University of Oregon; and Moravian. The Purdue students had a daunting 51.2% return for the year, but "they did not want to share any information, so we did not learn their secret," Ravelle said, adding dryly: "I suspect that this level of return is not sustainable."

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