Hancock Holding Company announced that the Hancock Horizon Burkenroad Small Cap Fund, that uses investment research produced by university students, has received a five-star overall rating from Morningstar.
The fund, celebrating its 10th anniversary, also ranked in the top 1% among small cap core funds for the 10-year period ending Dec.31, 2011, according to Lipper Analytical.
Launched in 2001 with less than $1 million in assets, the Burkenroad Small Cap Fund has grown to more than $90 million. The fund focuses on stocks with market caps of less than $2 billion for companies located or doing business in the Gulf South, which encompasses Alabama, Florida, Georgia, Louisiana, Mississippi, and Texas.
The fund is named after and partially based on research coming out of Tulane University's Burkenroad Reports program, which produces student-written investment reports on regional publicly held companies.
“The students are doing fundamental research, where not only are they tearing apart balance sheets and statements, but they're also interviewing management and evaluating competitors," noted Hancock Horizon Fund Manager David Lundgren, CFA who has managed the fund for the last decade. He spoke about this with the New Orleans Times-Picayune.
The investment research program sponsored by Tulane University’s A.B. Freeman School of Business is designed to teach students how to produce objective investment research by studying publicly held companies located in the Deep South.
“Since its inception, the Burkenroad Small Cap Fund has experienced a 10.59% return as compared to its benchmark, the Russell 2000’s return of 5.62% for the same time period,” Lundgren goes on to say.
Peter Ricchiuti, director of research for the Burkenroad Program and assistant dean at A.B. Freeman School of Business said he hasn’t been surprised by the fund’s success.
He describes the companies that the fund focuses on as “stocks under rocks.” This is the study of publicly held companies located in the Deep South that are not heavily followed by other investment analysts. “It may not be flashy or sexy," Ricchiuti said. “But I really think in the long run it’s the way to make money.”
Lundgren agrees. “The whole theme of ‘stocks under rocks’ and these unknown companies in the Deep South that have great potential; that theme is attractive to us as it is to individual investors.” Lundgren said.
Mary Ann Tasoulas writes for Money Management Executive.