University of Delaware Office of Public Relations The Messenger Vol. 5, No. 3/1996 Blue Hen Investment Club manages $500,000 portfolio University of Delaware College of Business and Economics students in the Blue Hen Investment Club are gaining hands-on experience working with a real-dollar investment portfolio of $500,000. Faculty adviser Donald Puglisi, MBNA America Business Professor of Finance, says the group was organized last spring and drew up policies and procedures for a sound investment management process. Members of the club then made a presentation for funding to the Investments Committee of the Board of Trustees, which approved $500,000 from the invested operating funds of the University. "The primary missions of the club are to provide the members valuable educational investment and general business experiences," Puglisi says. "Managing an actual portfolio with a specific purpose is different from theoretical investments on paper. Like any investment manager, the club has a performance target. In this case, the goal is to do better than the Standard & Poor's 500 Index in terms of return on the investments." One of only 35 such campus organizations in the country, the Blue Hen Investment Club is one of the 10 largest in terms of portfolio size, Puglisi says. Student investment groups are at work at the universities of Virginia, Maryland and Wisconsin, Virginia Polytechnic Institute and State University and Ohio State University. At Ohio State, the funds managed by students doubled from the original $5 million endowment to $10 million in five years. The fund has generated $653,397 in dividend income for Ohio State. According to Dean Kenneth R. Biederman, the Delaware program, suggested by President David P. Roselle, has met with enthusiasm. "I have attended meetings of the club, and the students are excited about this opportunity," he says. "They are well- organized, diligent and serious about their purpose. They have been doing their homework on the best investments in different fields, such as pharmaceuticals and technology. Above all, the club provides a learning experience. The students also are enjoying themselves while organizing the club, preparing the way for future members." According to the club's president, Tam Vuong, Delaware '96, the club has provided a variety of valuable educational experiences for its members, first in organization and then in carrying out research on stocks in core industries, presenting proposals and making investment decisions. The club's emphasizes investments in common stocks. An investment committee manages the portfolio, analyzes each stock considered for inclusion in the portfolio and keeps detailed minutes of each meeting. An accounting committee is involved with internal and external reporting requirements but is not involved with portfolio composition decisions. To ensure proper University oversight, Puglisi and Peg Patten, who administers the University's portfolio, serve on the club's executive committee and are responsible for authorizing the execution of trades for the portfolio account. The investment decisions, however, are strictly those of the club members. The portfolio itself is held at Wilmington Trust Co. Puglisi says, "Members have to develop and present ideas that may or may not be accepted by their peers, and this kind of group dynamic is also educational and part of the 'real' business world. "It is too early to comment on the portfolio's performance," Puglisi says, "but of the 15 stocks purchased thus far, 13 are up and two are down. However, the emphasis and purpose of the club are to provide a hands-on, educational experience for students." -Sue Swyers Moncure