"STAR provides a great opportunity for our students to apply the concepts they learn in classes to the market," said Stewart. "They are constantly learning more about companies whose products they use and who they might actually work for one day. Additionally, students tend to be highly motivated when working with a real money portfolio."
Although many universities have student-managed investment fund programs, STAR's operating structure is not typical. Unlike other programs, ACU undergraduate students, not graduate students, manage STAR, said Stewart.
In the 1980s, associate professor emeritus of management sciences A. Don Drennan and his wife, Rudith, made a donation to ACU to start a student-managed investment fund. The donation was lumped into ACU's overall endowment fund, and by 1999 the original $25,000 donation had grown to $50,000. Later that year, Stewart, Dr. Jack Griggs, professor of business, Dr. Terry Pope, professor of finance and ACU trustee Randy Nicholson pooled their money to start the student-managed investment fund known as STAR.
STAR made its first stock purchases in June 2000. The purchases included stocks from DuPont, Cisco Systems, Caterpillar, International Paper, Microsoft and AT&T. The fund has been fully invested for six years and has earned an average annual return of 8.66 percent versus 2.94 percent for the S&P 500, said Stewart.
In January 2005, STAR was restructured and the four individual investors withdrew their funds. ACU made an additional contribution and brought the total of the fund to $260,000. The original COBA faculty members continue to serve as STAR advisors.
"I believe that our students deserve a lot of credit for the quality of their research," said Stewart. "Very few student-managed funds can compete with the return our students have achieved since 2001."
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