Designed as teaching tools, an increasing number of business schools have launched student-run mutual funds, and even opening them to investors, according to The Wall Street Journal.
A dozen years ago or so, there were 30 such funds, according to the Association of Student Managed Investment Programs at
In hopes of getting real-world experience, students traditionally manage chunks of the their schools' endowments, but recently, some schools have opened funds to alumni investors, and even the public. Outside investors usually must prove certain affluence before being allowed to participate in these funds, which are considered to bear above-average risk.
Student managers issue quarterly letters and annual reports, like other funds, and many track benchmark indexes. They also visit companies and interview chief executives. While most are candidates seeking master's degrees in business administration, some funds include undergraduates.
And several beat their benchmarks. The Carlson School Growth Fund, a student-run stock fund at the
And also like the real world, not every fund is a winner. Funds run by students at
Other funds, such as the Cayuga Fund at
Student-run funds also have obstacles full-time funds don't, such as school vacations and summer, as well as managers who invariably graduate.
Because most managers are not paid, expense ratios tend to be lower than the 1.25% average and used for services from accountants and attorneys.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
