Since 1993, thanks to donations from alumni and the school’s foundation endowment, a group of select Virginia Tech students have their hands on $5 million dollars each year that is then used to invest in the stock market year round.
This year, the team consists of 36 students who were selected after a competitive application process to be a part of the team and help manage the money.
Student-managed Endowment for Educational Development (SEED) “tries to beat the S&P 500 index through active management,” said Logan Stone, senior finance and accounting major and chief investment officer of SEED.
The S&P 500 Index is a “market-capitalization-weighted index of the 500 largest U.S. publicly traded companies by market value,” according to www.investopedia.com.
Each week, members of SEED meet to discuss how to improve their portfolio. Supervised by Dr. Randall Billingsley, finance professor at Virginia Tech, students are encouraged to analyze different shares and choose which would better benefit the program in the future, based on their specific sector.
Different sectors may want to buy or sell securities and the lead analysts within each sector then vote.
Aside from buy and sell pitches, market discussions are also commonly held where analysts update the group on their holdings and industry trends.
SEED operates based on a number of people in leadership positions. The executive team oversees their analysts for each sector. This way, bad pitches are weeded out and the portfolio remains strong.
Similar to SEED, Bond and Securities Investing by Students (BASIS), works with the same amount of money but channeled toward bonds and securities rather than stocks and equities. The two teams remain relatively separate, but they do meet every once in a while to discuss progress.
“One thing we want to improve on in the future is to collaborate with (BASIS) more often. As of right now, we’re pretty separate, distinct groups,” Stone said.
Thus far, members of SEED have had a successful rate of 100 percent job placement after college. Out of that 100, this year “about 50 percent of our members have been placed into Wall Street roles,” Stone said. These include sales and trading, investment banking or anything under the broad umbrella of finance.
“Similar to how engineering students have labs, SEED is the closest Pamplin students can come to having a lab. It offers real world experience in portfolio management and evaluation which is something that top-tier firms like to see,” Stone said.
Through SEED, students get a close-up experience that is closely comparable to what it is like outside of the classroom. It is a great way to determine if the finance world is for you.
SEED is open to all majors, finance-related or not. Today, the majority come from engineering and finance, but SEED is looking to branch out even further.
Students are encouraged to apply at the start of each semester online at http://virginiatechseed.com/, or in person.