KINGSTON, R.I. – April 9, 2021 – The University of Rhode Island’s Ram Fund recently captured first place for its 2020 performance in the Core Portfolio division of the 2021 Quinnipiac Global Asset Management Education Forum, the largest student-run financial conference in the world.
To be eligible for the competition, students were required to submit their portfolios for 2020. All student portfolios were required to have managed real money, with all decisions made by the students.
“2020 was one of the more difficult years to manage money,” says Michael Ice, a senior lecturer in finance who co-teaches the Ram Fund class in URI’s College of Business. “The students were thrust into a pandemic, collapsing economy and severe market crash, and forced off campus. They managed to handle extreme adversity and produce astounding returns – ones that top professionals would envy.”
The Ram Fund is URI’s student-run equity fund, which manages a portion of the University of Rhode Island Foundation & Alumni Engagement Endowment Fund. Established in 2001 with an initial investment of $100,000 by the URI Alumni Association, the fund has grown to a market value of more than $800,000 in 20 years.
The Ram Fund class – BUS422/423 – is an elite, application-only course that fosters a truly experiential learning environment. It’s a non-traditional class with no textbooks, no tests and no lectures during which students serve as sector analysts and portfolio managers. Along with Ice, the class is run by Deborah Imondi ’82, Executive MBA ’86, who has years of experience in investment and wealth management and is chair of the Investment Committee for the Foundation.
Each semester the fund’s portfolio is passed to a mostly new set of students to manage – along with some who may be taking the class for a second semester. The students make all the decisions to buy, sell or hold stocks in the portfolio. Divided into three-person teams, the students serve as research analysts for different industry sectors. They pitch proposals to buy and sell stocks to their classmates. All then serve as portfolio managers, each with one vote.
“Deborah and I guide them, coach them, teach them. But at the end of the day they make all the votes. We don’t get a vote,” says Ice, who joined the URI faculty after 30 years on Wall Street. “The students walk away with the discipline to do the research, use the right models and tools and make good risk-reward decisions. The first time a student gets fiduciary responsibility, it’s a little scary because they’ve got somebody else’s money. That’s a big responsibility.”
With the class limited to 15 students, Ice picks from the cream of the crop needed to manage real money – students who have the competency, interest, passion and willingness to put in the hard work and long hours in the Sherman Trading Room.
“You don’t manage an $800,000 portfolio in about two and a half hours a week,” he says. “Students will spend up to 30 hours a week outside of class in the trading room, honing those skills so they’re in a position to make those decisions.”
Ethan Trzepacz, who graduates in May with a degree in finance, has been a Ram Fund analyst for two semesters. He says it’s sharpened his skills in fundamental analysis and time management, along with his ability to articulate his thoughts about a company’s strengths and weaknesses.
“I aspire to become a wealth manager in the future, with a specialization in becoming an investment adviser,” says Trzepacz, of Mont Vernon, New Hampshire. “The Ram Fund has prepared me in being able to effectively express myself, not only on a one-on-one basis but also on a group presentation level. It has also given me a deep understanding of the capital markets, as well as shown me that hard work is absolutely key in succeeding in your future endeavors. It has been a remarkable learning experience.”
Meghan Finley ‘22, of Ocean City, New Jersey, an honors student majoring in finance with minors in leadership studies and Spanish, has earned an appreciation for the responsibility of managing other people’s money. “We need to act ethically and only in the investors’ best interests. Accordingly, we shouldn’t take unreasonable risks or make impulsive decisions,” she says. “That takes extensive research and making decisions as a team.”
In winning the Core Portfolio competition, the Ram Fund turned in a strong performance for the 2020 calendar year. The small to mid-cap portfolio had a 55.1% return on investment – outperforming the VXF Index by 23%. “I don’t know if there’s any professionals out there that could stake that claim,” says Ice. “It was an incredibly impressive year for the students.”
The performance came during a very challenging year. Last spring, the market was in free fall, the students were sent home because of the pandemic, and Ice had to get the students remote access to Bloomberg, its primary analytical tool so they could continue to manage the fund. At the end of the semester, the students had to adjust the portfolio to prepare it to be idle over the summer. In September, a new set of students had to deal with an entirely different market, one that was rebounding from the pandemic.
“Managing the portfolio in the fall semester was a turbulent time, yet also very exciting,” says Trzepacz. “In the wake of the pandemic, many companies in the small to mid-cap space remained far below their respective fair values. With value investing being an emphasis of the fund and one of our core competencies, it allowed us to capitalize on the stocks that we believed were under fair value, as well as companies that would benefit from the adaptation of the post-COVID world.”
This past fall, Finley was one of the analysts in the health care and basic materials sector. Evaluating health care companies was tricky, she says. She and the other sector analysts had to determine if companies would be profitable during the pandemic and after.
“We had to do extremely thorough research. To pitch companies to the class, we needed to know what type of medical equipment they made and what disease it was designed for, on top of the normal analysis,” she said. “The fund had to evaluate companies through a different lens than usual, in a time when no one knew which way the stock market would react. Considering that it was a pandemic and an election year, we had to continually take into consideration many different variables.”
Quinnipiac’s Global Asset Management Education Forum attracts about 150 colleges, providing participants the opportunity to discuss and debate financial best practices with world-renowned industry leaders. At the end of the conference, schools around the country are recognized during a Global Portfolio Competition Award Ceremony. Other notable first-place winners included University of Virginia (growth portfolio), Washington College (value portfolio), and Texas State University (fixed income portfolio).