The fund, started by Alcon Laboratories co-founder William C. Conner, has grown to $1.5 million since its inception in 1973, according to its Web site. Students donate 6 percent of the fund’s end-of-year value to Baylor’s department of ophthalmology in Houston and to TCU, said faculty adviser Larry Lockwood.
Over the years, students have given more than $2.25 million in dividends, more than any other student-managed university fund in the country, Lockwood said.
Kelsey Biegert, a senior finance and accounting major, said the class members support and challenge one another, which makes for a great learning environment.
“You’re being evaluated by your peers, so it’s not one person judging you, it’s 15,” Biegert said. “When you’re standing up there, you want to do a good job because when you invest in a stock it’s not $10, its thousands of dollars.”
According to the fund’s portfolio and a recent Etoro review, energy stocks Cameron International Corp. and Schlumberger Ltd., and technology stock Anixter International Inc. turned in the best percentage gains this year. Cameron International and Schlumberger recorded gains of 74 percent and 69 percent, respectively, while Anixter International turned in a 49 percent gain.
Lockwood said students choose how to weight their stocks from the Standard & Poor’s 500 index, and their bonds from the Lehman Brothers Government/Corporate Bond index.
Within the S&P 500, there are certain sectors, each holding a weight of the total index. The class looks at how the S&P 500 weighted each sector and adjust the weights accordingly based on its own analysis.
“That’s where we start making important decisions in regard to the economy,” Angelico said.
Students who want to get into the class must submit an application and resume, and, if qualified, are called in for an interview. Lockwood said these students are some of the best at the university.
“There are usually plenty of perfectly well-qualified people, but there just aren’t enough spots,” Angelico said.
Senior finance major Chris Boerner said that although he spends about 20 hours per week working outside of class, he enjoys what he’s doing.
“It’s a lot of work, but you get a lot out of it,” Boerner said. “I learned a lot about the stock market and business, and I really enjoy working with the other people in there.”
Students take the class for two semesters, Angelico said. However, the class is staggered so students join and leave the class every semester.
Angelico said the fund operates with a running portfolio. Students typically spend their first semester learning about existing stocks and try to introduce a new stock to the class during their second semester.
The class is atypical of others in that there aren’t many lectures, Angelico said. Students are responsible for creating a 20 to 25 page report on their assigned stocks, and class time is spent discussing each stock in the portfolio, Boerner said. Lockwood said recruiters tell him these reports compete at a high level with similar reports from professional analysts.
“(The models) are where you have to think about how much the company is worth,” Angelico said.