Students Profit From Investment Group

The University of Oregon Investment Group (UOIG) is the realization of a simple yet powerful idea: provide students with the opportunity to enhance their education and career opportunities through the experience of managing a real investment portfolio. The UOIG is a student-run group in the Charles H. Lundquist College of Business, with two objectives: first, to provide students with real-life, practical investment experience; and second, to achieve superior investment results.

With sixteen current members, the UOIG manages two equity portfolios. The initial portfolio was capitalized with $50,000 from D.A. Davidson, a regional brokerage firm. Through a disciplined investment process, careful diversification and superior research, the UOIG had a return of -11.92% for the year ending August 31, 2001. While the group's return was negative, they managed to beat both the S&P 500, which returned -24.96% and the Russell 2000 index, which returned -13.45% over the same period.

Presently, the UOIG is preparing to invest a second, much larger portfolio that allows for more diversification, lower trading costs, and realistic investment management scenarios. This portfolio is currently funded with $420,000, including $250,000 from the UO Foundation and funds from four private investors. The UOIG expects to begin investment of this portfolio before the end of the Fall Quarter. Additional funds are expected in the next few months to bring the total to $500,000.

Group members are divided into five industry groups: biotech and health care, consumer goods, technology, financials, and industrials. The UOIG invests their money in specific stocks only after extensive and careful study of the business and industry along with a valuation of the company using tools developed in the classroom. Then the hard part, during a formal presentation the student analyst must persuade their peers why the UOIG should (or should not) invest in that stock. After the presentations, the entire group votes and the majority decides if they will invest.

"The UOIG provides students with the opportunity to take ownership of an organization that has very real and high stakes," comments Assistant Professor John Chalmers. "To date these students have proven that they're up to the task of running an investment management organization in a challenging environment. The UOIG is a demanding environment because of the continual training and recruiting that is required to maintain continuity in the group. The students have shown an ability to meet every challenge that they have faced."

The UOIG is another excellent example of how the Lundquist College of Business facilitates classroom learning through real experience. This reinforces what we teach, and increases the marketability of our graduates. Founding UOIG members from last year have gone on to impressive jobs, including jobs on Wall Street once only dreamed of by UO seniors.

For more information visit the UOIG Web site at uoig.uoregon.edu.

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