Student-run equity fund beats S&P 500

Business students work on Bloomberg terminals
College of Business students work on Bloomberg terminals.

It’s been a strong year for the U.S. stock market, but it’s been an even better one for the College of Business’s student-run Summit Fund. At the end of November the fund had earned a year-to-date return of 29.62 percent, beating the S&P 500’s 20.49 percent return over the same period.

Working out of a state-of-the-art lab with 16 Bloomberg terminals, roughly two dozen undergraduate students manage a diverse portfolio worth over $450,000, voting as a group whether to buy, sell, or keep holdings.

Chris Stein, a lecturer in the Department of Finance and Real Estate, serves as a faculty advisor for students in the Summit Fund.

“They all take it seriously because it’s real money,” said Stein. “The fund connects the dots from students’ previous academic experiences.”

The group doesn’t aim for quick gains, but rather focuses on asset performance over three to five years. Many of the dividends being reaped now can be attributed to the efforts of students who have since graduated.

Aaron Avery at graduation
Aaron Avery high-fives a College of Business classmate during their graduation in 2016.

Aaron Avery is one such student, currently working as a financial analyst at Partners Group in Denver. He graduated from the College of Business in 2016 and was in the fund for two semesters, serving as Vice President.

“There’s minimal guidance … and I think that actually taught me a lot and helped me grow both as an individual and as an academic,” said Avery.

“It kind of forces someone to learn on their own and challenge themselves.”

Beyond developing investment skills, Stein sees tremendous value for the students in other aspects.

“It really develops critical thinking, the ability to gather pertinent information, analyze it, come to a conclusion and communicate it to others,” Stein said.

Michelle Betsinger, who graduated alongside Avery,  found that to be exactly the case.

Betsinger works at Vanguard – one of the world’s largest investment companies with over $4 trillion in global assets – and she serves as an investment operations supervisor, overseeing five employees at the company’s Scottsdale, Arizona, offices.

She credits her time in the Summit Fund for helping her learn to clearly articulate a point of view supported by data, as well as developing a more grounded view on taking investment risks.

“With simulations, you have no skin in the game,” said Betsinger, comparing the experience of the fund to making mock trades in other classes.

“You really learn a lot of the skills you need to be a leader,” she said, emphasizing how useful the persuasive expertise she picked up in the fund has been, complementing her financial know-how.

Stein sees the diverse talents that students build having broad applications across different career paths, even outside of finance.

“Communication skills, especially on a technical subject, are really powerful,” said Stein. “If you can’t communicate effectively, your idea won’t be implemented.”

And merging the classroom learning experience with real-world, team-based, decision-making puts Summit Fund students ahead of the game.

But beyond the investing skills, Stein sees tremendous value in the work being done by students.

“It really develops critical thinking, the ability to gather pertinent information, analyze it, come to a conclusion and communicate it to others,” Stein said.

“That can be applied to many types of positions even outside of finance,” said Stein. “You can be the smartest finance person in the world but if you can’t communicate effectively your idea won’t be implemented.”

Stein gives all the credit for the performance of the fund to the students who make all the investment decisions for the firm.

“The class has evolved into what it is today largely as a result of the efforts of previous faculty advisors and students who helped develop the structure and techniques we use today,” Stein said.