2021 was a year of high risk, high reward in the U.S. stock market. Student investors in the University of Delaware’s Blue Hen Investment Club (BHIC) at the Alfred Lerner College of Business and Economics were unfazed by the challenge and beat the S&P 500 Index again this year, continuing their 3-year streak. This achievement also marks the first time in UD history that BHIC beat the S&P four out of the past five years.
Alexzander Salmorbekov, honors accounting and finance double major with a minor in economics and BHIC chief strategist, provided insight into his thought process. “I did my best to predict macroeconomic trends within the market, including rising prices of oil, reopening of the global economy in a Post-COVID world and higher consumer inflation due to accommodating fiscal and monetary policy,” he said.
The S&P500 measures the value of the stocks of the 500 largest corporations by market capitalization listed on the New York Stock Exchange or Nasdaq Composite. The BHIC seeks to outperform the S&P500 Index yearly, on a risk-adjusted basis.
By the end of 2021, the S&P500 Index gained 26.9% in total return. BHIC rose to the occasion, returning a total of 32.64% for an outperformance of +3.94 in 2021. According to the SPIVA scorecard data, 73% of funds have underperformed the S&P 500 over the past five years, making the BHIC’s consistent success even more impressive.
Richard Jakotowicz, associate instructor of finance at the Lerner College and advisor of the BHIC, said, “I’m very proud of what the students accomplished in the Blue Hen Investment Club. Their outperformance can be directly attributed to their methodical approach to ensure that all decisions are made with the club’s best interest in mind.
“They have developed processes for every step involved in equity research,” Jakotowicz continued. “These processes include technical training for new and existing members, governance over the portfolio, and rigorous research requirements.”
Salmorbekov shared the same sentiment, saying “I see our outperformance of the S&P500 as a testament to collaboration in the Blue Hen Investment Club. We could not have outperformed without the hard work of individual sector heads and analysts within the club. They were able to pick excellent companies within their respective sectors which reflected the value philosophy that BHIC was built on.”
BHIC is a registered student organization available to UD students of all majors. Their mission is to provide members with a unique educational experience by managing a real dollar investment portfolio. The club manages over $4 million of UD’s endowment, allowing for students to gain professional experience with real dollar fund management as well as smart investing.
The BHIC also has a Charitable Grant Committee, which consists of an internal group of members in the club that allocate about 2% of portfolio’s assets to philanthropic registered student and non-profit organizations throughout the Newark area.