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Wash Journal   Fairfield Ledger
Neighbors Growing Together | Nov 24, 2017

University of Iowa student-managed investment fund tops $6 million

Earnings used to support scholarships, campus programs
By George C. Ford, The Gazette | Nov 14, 2017

IOWA CITY — The value of an investment fund managed by students at the University of Iowa Tippie College of Business has topped $6 million, 23 years after it was established with $50,000 in capital.

The Henry Fund’s 11.25 percent average annual growth is more than 1.4 percent better than the 9.84 percentage growth of its Standard & Poor’s 500 benchmark since 1994.

Earnings from the fund are used to support the UI’s educational programs. Over the past five years, $670,000 were used to support student scholarships and campus programs.

The Henry Fund is managed by 10 to 12 students enrolled in the applied management securities class in the Tippie College’s Iowa Master of Business Administration program who plan to pursue careers in financial management.

Each student analyzes a sector of the economy and offers recommendations to buy or sell companies.

The students gain practical experience managing a real-money investment fund, rather than a simulated fund.

Student-managed investment programs are a growing trend in finance education. More than 200 programs nationwide allow students to make investment decisions with real portfolios, according to the Association of Student-Managed Investment Programs at Stetson University in DeLand, Fla.

The Henry Fund invests in U.S. publicly traded companies that are industry leaders with above-average investment potential.

“We have done well by focusing on long-term, fundamental valuation with a buy-and-hold philosophy of managing the portfolio,” said Todd Houge, a member of Tippie College’s finance faculty and the Henry Fund’s faculty adviser. “With a team of 10 to 12 analysts, we generally need strong, convincing arguments and research in order to convince the team to put something in the portfolio.”

The Henry Fund’s biggest one-year increase came in 2003, when it grew 37 percent. Its largest loss was the recession year of 2008, when it fell 38 percent in value.

The fund rebounded in 2009 with a 34 percent increase in value.

The Henry Fund is named for Henry Tippie and Henry Royer, two UI benefactors who provided a portion of the initial $50,000 in capital. The fund also accepts contributions from other supporters.

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