TheÂ student managersÂ of the Tanner Fund continue to outperform their benchmark, the S&P 500. From its inception in May 2001 to last count at December 2005, the Tanner Fund has increased in value by 16.2 percent. Over the same time period, the S&P 500 is up only 0.5 percent. The performance gap widened during the most recent completed investment term â€” May 15 to Dec.14, 2005 â€” as the fund earned 13.4 percent to the S&P 500’s 8.8 percent.
The most recent group inherited a fund with 31 individual stocks, liquidated 15, and added another 10 stocks of their own for a trimmed-down fund of 26 stocks. The students hope their allocation strategy of overweighting energy, health care and consumer discretionary sectors while underweighting industrials, financials, information technology, telecom and utilities will continue the fund’s strong performance trend.
The Tanner Fund, established with a $250,000 gift from Jamey and Richard Tanner ’53, puts competitively-selected students in charge of the live portfolio, with each student fulfilling typical roles such as that of the fund’s research economists. Professor Tim Dye teaches the fund in an upper-level finance course, where there is already a waiting list for the Fall 2006 management team.