Tending a Student-Led Investment Fund in Tough Times

By Caperton Gillett


For a group of students in the UAB School of Business, the colors green and gold evoke something besides school spirit. That’s the result of some wise moves by the Green and Gold Fund, UAB’s student-managed investment portfolio, which continues to rise even in the midst of a recession.

“We’ve got a lot of cash right now, which is fun, because there are a lot of long-term opportunities—if you’re particular about what you purchase,” says Stephen Garrett, a finance student who is the chief investment officer on the fund. Garrett describes his role as “part of a team that manages a chunk of money around here.” In other words, he monitors the fund’s portfolio and works with the analysts and managers to maximize performance while keeping risk to a minimum.

Finance faculty started the fund in 2005 to provide students with career experience in the fast-paced world of investments long before graduation. In 2008, the fund won first place against 50 other undergraduate growth-style portfolios at the RISE (Redefining Investment Strategy Education) forum and national collegiate competition. Both CNBC and BusinessWeek magazine have spotlighted the team’s success.


Jake Gelber
Jacob Gelber

Beginning with just $300,000, the fund has grown to more than $420,000 under the watchful eyes of Garrett, his fellow team members, and faculty advisor Jacob Gelber, J.D./M.B.A. Gelber offers students plenty of hard-won market wisdom. Before he came to UAB, he was a corporate lawyer specializing in securities transactions, and more recently he was an investment advisor in Morgan Stanley’s global wealth management division.

When the fund hits $500,000, income will be used for scholarships in the School of Business. For now, the team is working hard and riding the wave of a tumultuous economy.

“In 2008, the Green and Gold Fund outperformed the Dow Jones Industrial Average and the S&P 500 index because the students sold stocks to build up a large cash reserve a few months before the market crashed,” Gelber says. “When the investing environment began improving in spring 2009, the student portfolio managers wisely began moving this cash back into stocks." Gelber cites the students' experience with banking giant Wells Fargo as an example. "In April, the Fund believed that Wells Fargo was undervalued and relatively healthy compared to its peers, and purchased shares in the bank for $15.29 per share," Gelber notes. "As of February 12, 2010, the stock closed at $26.88, which means the Fund is looking at a 75 percent return on investment, plus an annual dividend of $.20 per share.



The magnetism of the markets attracted business student Daniel Wilson to the Green and Gold Fund. Wilson, portfolio manager for the fund’s information technology/telecommunications sector, has had an interest in finance and economic theory for several years, and the chance to test those theories while researching real companies and spending real money was one he couldn’t pass up. “The ability to experience working with money is the primary draw,” he says. Although the current economy “is making stock picks difficult, especially with the huge recovery we had over the summer,” Wilson feels that the team is up to the challenge, particularly in light of the fund’s longer time horizon. “We have to pick out the stocks that still have room to run and the companies that are still improving or undervalued,” he says.

Nick Sanford, portfolio manager for the financials sector, is already adept at that task. Sanford spent four years as an actuarial analyst, examining data and trends and forecasting financial outcomes, and another two as a financial analyst before coming to UAB to earn bachelor’s and master’s degrees in accounting. “I play with numbers all day,” he adds. “This is the perfect fit for what I want to do.”



Serena Durham gravitated to the Green and Gold Fund after hearing a finance professor describe the field as more of an art than a science. “I found my calling,” she says; soon she had exchanged her marketing major for finance and, in her senior year, joined the fund. The self-described “newbie” manages the consumer goods portfolio and has found her trial by fire “nerve-wracking” but very rewarding.

“It’s a simulation of the real world,” Durham says. “If I decide to try to conquer Wall Street when I leave school, I’ll have that experience. That’s the most exciting part.” Trading actual money can be “scary,” she says, but “having mentors and my team members to help is huge.”

As an old hand in the finance business, Sanford is less intimidated by the prospect of a loss. “It is an incredible opportunity to be able to talk with like-minded people and faculty advisors and to trade real money,” he says. “Having that responsibility is probably the most important part of it—it’s a priceless opportunity. It’ll be a long time before I’m able to trade that much of my own money.”


Money Talk

Investment Philosophies from Green and Gold Fund Principals

Stephen Garrett
“The long-term goal of a fund is to last forever and generate income. Manage it in a conservative manner with growth and income in mind, stay with it, and stay vigilant.” —Stephen Garrett, chief investment officer
Nick Sanford

“It’s psychology. What you have to do is not predict what’s going to happen in the future but what other people think is going to happen. It’s a psychological game of out-thinking everyone else.”
—Nick Sanford, portfolio manager, financials

Serena Durham

“Look at the world around you. If Christmas is coming up and everyone is buying electronics, look at Best Buy. If Wal-Mart is updating its layout and marketing, that will bring response up. Look around and get an idea of where you should be in the market.”
—Serena Durham, portfolio manager, consumer goods

Daniel Wilson

“It requires patience to wait 18 or 20 months for a stock pick to turn out. It may work out in a few months, but you may have to wait a year or more for things to work out as you planned.”
—Daniel Wilson, portfolio manager, information technology/telecommunications

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