NEW ORLEANS — With all of the ups and downs of the stock markets over the past decade, the average investor might wonder who’s watching over his mutual funds.
In the case of the Burkenroad Fund, it’s a group of students at Tulane University’s Freeman School of Business who spend hours combing through the financial reports of companies that a lot of retail investors haven’t heard of and analysts don’t follow — and eventually find many of the stocks the fund buys.
The results over a decade of student involvement aren’t anything to sneeze at. According to Burkenroad’s prospectus, the no-load version of the fund, which started Dec. 31, 2001, had returned 11.9 percent since inception through March 31, 2011. The fund, managed by Biloxi, Miss.-based banker Hancock Holding Co., has assets of about $70 million. The fund licenses its name from the university but is managed independently from the school.
The Russell 2000 index, a benchmark barometer of small- and mid-cap companies, returned an overall 7.5 percent over the same time.
In the recessionary year of 2008, when many 401(k) plans lost much of their value, the Burkenroad Fund suffered a loss of just under 25 percent, compared with 33.8 percent for the Russell 2000. Both rebounded the following year.
Peter Ricchiuti, who teaches the stock analysis course, said he picks most of the companies and students come up with others. He said the Burkenroad Fund’s reliance on student reports is unique, although other business schools put their students to the task of researching investments for university endowments.
About 200 students over the current school year have been evaluating 40 companies across the South. All of their final analyses — known as Burkenroad Reports — are available to the public.
“At the Freeman school, we do our due diligence and take a more long-term look at investing,” said Anthony Elia, a 25-year-old graduate student in finance from Pasadena, Calif.
The group looks for profitable companies — and those that don’t have many financial analysts following them. “One of the things is that we can clearly understand what they do,” Ricchiuti said. “No wild high-tech companies. Just meat-and-potato companies.”
Alexandra Thurber, a graduate student from Bethesda, Md., first reported on oilfield service company Willbros Group Inc. and now is team leader of a group analyzing egg producer Cal-Maine Foods Inc. and Pool Corp., which provides swimming pool products. She’s not sure yet whether she’ll be doing the same task for a living.
“My background is in math, and this is an extension of that,” Thurber, 25, said.
