ERIE, Pa. — In its 10th year, and with more than $1 million in holdings, the Intrieri Family Student-Managed Fund at Penn State Behrend paid a different kind of dividend: Thirteen student analysts earned scholarships that were paid from the fund’s profits.
Additional scholarships will follow, as long as the fund’s balance remains above $1 million. That provides an additional incentive for students, who manage a portfolio with approximately 40 stocks.
“No one wants to be the one who tanks the fund and ruins this for everyone,” said Michael Tejchman, a 2021 graduate who now works at BNY Mellon.
That pressure increased over the last year as the Federal Reserve tried to tame inflation by raising interest rates. The S&P 500 — the primary benchmark for the Intrieri fund — fell by more than 19%.
The Intrieri fund ended the year ahead of the benchmarks but still lost approximately 8% of its value.
“Nobody panicked,” said Tim Krause, director of the fund and an associate professor of finance. “We kept meeting, and I kept saying to the students, ‘Look, we have a strategy, and we’ve executed it. Trust in that. Hold on. We’ll see how this works out.’”
A bear market was always a risk for the student-managed fund, which launched in 2012, building on a $100,000 gift from Behrend alumnus Vincent Intrieri and his wife, Joanne. Because the fund uses real money, the student analysts feel a responsibility that can’t be matched by a classroom simulation.
“Mock portfolio classes tend to be a waste of time,” said Vincent Intrieri, class of 1984, the founder and CEO of VDA Capital Management LLC and a former senior managing director of Icahn Capital LP. “Students don’t really do the work. They listen to their buddy, or their uncle, or whomever, and they put all the money into a few big-name stocks. It doesn’t really teach them anything.
“When you’re dealing with real money,” he said, “you very quickly learn to appreciate the stakes.”
As a result, the student analysts tend to favor value stocks. When the market is down, they look for bargains: In 2022, the fund added stocks in Tesla and Meta Platforms, the company that runs Facebook.
Most students pitch at least four stocks every semester. They offer detailed valuations, including price targets, and the team votes. A smaller group manages the portfolio during the summer months.
Krause serves as the team’s adviser, with help from Phil Stuczynski, an assistant teaching professor of finance. But the students have the final vote.
“Their immersion in the fund really becomes the marquee item on their resume,” said Greg Filbeck, director of the Black School of Business. “They learn to be careful and thorough with their research and to be strategic as they balance the fund. They also hone their communication skills. They need to be able to convince the rest of the team that the stock they picked is the right fit.”
Even in a down market, with the S&P and other benchmarks wobbling, students can point to their experience with the Intrieri fund as they meet with potential employers.
“It’s a differentiating experience,” Filbeck said. “These students enter the job market having managed an investment portfolio that is worth more than $1 million. They can point to something more than classroom knowledge. They can show the fund’s growth and say, ‘I contributed to that.’”
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