NOTEBOOK: UI student-managed Henry Fund reaches $6 million milestone
JOE GARDYASZ Oct 31, 2017 | 5:01 pm
1 min read time
293 wordsBusiness Record Insider, The Insider NotebookAs the Dow broke the 23,000 threshold for the first time in October, a longtime student investment fund at the University of Iowa also set a record of its own. The Henry Fund, which is named for UI benefactors Henry Tippie and Henry Royer, passed the $6 million mark in valuation for the first time last month, 23 years after it was established with $50,000 in capital.
The fund has posted average annual growth of 11.25 percent, compared with the S&P 500’s 9.84 percent annual growth since 1994. The fund is managed by 10 to 12 MBA students enrolled in the Applied Management Securities class in the Tippie College of Business who plan to pursue careers in financial management.
“We have done well by focusing on long-term, fundamental valuation with a buy-and-hold philosophy of managing the portfolio,” said Todd Houge, a member of Tippie College’s finance faculty and the fund’s faculty adviser. “With a team of 10 to 12 analysts, we generally need strong, convincing arguments and research in order to convince the team to put something in the portfolio.”
Scanning the portfolio, I found one Iowa-based stock, Casey’s General Stores. Not surprisingly, the portfolio’s largest current holding (6.8 percent of the fund) is Apple, which had about a 35 percent return in the latest quarter.
Since 1999, the fund’s biggest one-year increase came in 2003, when it grew 37 percent. Its largest loss was the recession year of 2008, when it fell 38 percent in value. It then rebounded with a 34 percent increase in value in 2009.
Earnings from the fund are used to support the university’s educational programs. Over the last five years, an impressive $670,000 of the fund’s earnings were used to support student scholarships and campus programs.