UNB Student Investors Excel despite Financial Crisis
Students in the University of New Brunswick's Student Investment Fund program continue to outperform the market despite the worst capital market collapse since the Great Depression. While the students have beaten the market over 13 years of investing, they have shown consistent outperformance surpassing their benchmark by nearly 200 basis points during the period beginning 2008 and ending September 30, 2010.
In 1998, the faculty of business administration was given $1 million by the New Brunswick Investment Management Corporation for a select group of students to manage. Last month the fund reached the $2.5 million mark and continues to climb.
The students' investment success during the "Great Recession," which has lasted more than two years, can be attributed to a number of investment decisions. They accurately maneuvered between the stock and bond portfolios during that time. In addition, they were overweight provincial versus federal government bonds, which has created positive portfolio performance since March 2009.
Superior stock selection was also a factor in the fund's gain. An investment in the Potash Corporation of Saskatchewan (PCS) long before the BHP Billiton hostile takeover bid proved to be quite favourable to the student investors. The students sold off half of their position in PCS at $156 well beyond their purchase price of $61.
New monies have been made available through a bequest. The Hugh Seeley Fund will be launched in the New Year allowing SIF students a wider variety of investment opportunities.
