Tufts Financial Group gives students competitive edge
Published: Tuesday, October 25, 2011
Updated: Tuesday, November 1, 2011 23:11
Tufts may not offer a business major, but interested students can still gain real−world investment experience with the Tufts Financial Group (TFG) through the management of the Tufts Alpha Fund, a student−run investment portfolio.
The fund was established in 2008 with a donation of approximately $30,000 from a Tufts alumnus, according to TFG President Jay Joshi, a senior. The fund has since grown to about $64,000, according to Lecturer of Economics Christopher McHugh, who serves as the faculty adviser for TFG.
Investment decisions for the fund are made entirely by group members, enabling those students to gain investment experience.
"There's no question about your commitment when you're really buying and selling things with real money," McHugh said.
TFG does not keep any of the money made through the fund, as the money is technically part of the university endowment, according to Joshi. Once the fund reaches $100,000, 20 percent of every additional dollar will go toward financial aid, he added.
TFG was founded to provide an outlet for students interested in pursuing finance to gain experience on campus, allowing students to better compete for jobs in the industry, according to TFG Portfolio Manager Seth Aschen.
"The Financial Group is designed to kind of fill a void that exists at Tufts because there isn't a business major for undergraduates," Aschen, a senior, said.
Once a week, active members of TFG meet and pitch stocks in which to invest, according to Joshi. Although TFG has approximately 400 members, only 80 are considered active members who attend weekly meetings and pitch ideas, according to Joshi.
The group's structure ensures accuracy while allowing new members to participate. TFG members join as analysts and conduct research on companies in a specific sector, while working under lead analysts, according to Aschen. Senior analysts oversee the lead analysts, and the portfolio manager supervises investment operations, he said.
The portfolio manager position entails filtering investment ideas from TFG members in order to create one cohesive investment strategy, according to Aschen.
"My job is to take all the investment pitches, all of the ideas, and both feed ideas back out to group members and then take the ideas they give me and make the investment decisions," Aschen said. "There needs to be someone singularly responsible."
TFG has developed an investment strategy that has allowed the group to consistently outperform its investment benchmarks, according to Aschen, even during the economic downturn of 2008. Benchmarks are used to measure the performance of investment portfolios. TFG measures its performance using a blended benchmark consisting 70 percent of the S&P 500's performance and 30 percent of the performance of the iShares Barclays Aggregate Bond ETF, according to Aschen.
TFG was featured in a 2008 Bloomberg Businessweek article, titled "Big Execs on Campus," which highlighted business clubs at other top institutions. What differentiates TFG from similar groups at other institutions, Aschen believes, is the fact that it is run entirely by undergraduates and deals with real money.
"I think that it forces undergraduates to really step up and make the most of the opportunities," Aschen said. "Whereas other groups [at different colleges] might discuss investments … we actually make the trades and own the stock."
Aschen said that his main goal as portfolio manager is to ensure responsible investment so that the fund will be available for future generations of TFG.
Aside from working on the fund, members of TFG have the opportunity to connect with alumni that are part of Tufts Financial Network (TFN), a group of alumni in the field of finance that hosts events. Although TFN has no role in the fund, it has provided a platform for connecting alumni with current members of TFG, according to Joshi.