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Lehigh performs well in Exchange Traded Funds contest

Though they didn’t grab top honors, students from Lehigh University more than made up for it by winning nine out of the 13 awards in Clear Index’s first-ever “Next Generation ETF College Contest.”

ETF, or Exchange Traded Funds, are relatively new investment vehicles. They resemble mutual funds in their makeup, but are can traded throughout the day as their prices fluctuates, making them a flexible alternative for investors.

Only a few hundred ETFs are currently available to investors. But their growing popularity created an opportunity for Clear Index, who challenged students from Lehigh, Columbia and NYU’s Stern School of Business to develop original ETF ideas. The three schools combined to submit 100 entries.

Pengcheng Lin, a graduate student in Lehigh’s M.S. in Analytical Finance program, captured one of two second prize awards for his submission on the China 30 Value Index.

“China is one of largest and attracting emerging market in the world,” he says. “The 30 value index focuses on Chinese companies listed on US stock exchanges which can bring investment profits in the long run. It provides marketability and liquidity for investors.”

Clear Index CEO Andrew Corn agreed. “The news coming out of China hasn’t been good the past few weeks, but it has large number of value-created companies that are going to perform very well,” he says. “It was a very viable idea.

He says that his company did a lot of back-testing and modeling to see which proposals could work, and Lin’s was among the most thought-provoking and original.

Lin’s entry was not alone in that regard. “Lehigh stood out in that they had a real consistency of quality,” Corn says. “The lionshare of funds were very viable, and a good number of them were right there among the top entries. It was actually a very difficult selection process.”

Rick Kish, chair of the Perella Department of Finance at the College of Business and Economics, was happy with Lehigh’s response. “Basically, all these ideas were generated by our students and they ran with them on their own,” he says. “We’re really proud with the results. This was a great opportunity to use real world data in our Financial Services Library that our students will be expected to use when they leave Lehigh.”

Corn noted the relationship between the faculty and the students in helping to promote the contest and encourage both undergraduate and graduate level participation. According to Kish, Lehigh encouraged a more collaborative approach than the other programs, in many cases creating small teams to develop ideas.

"An amazing showing"

Fred Fraenkel ’71, chairman of Clear Asset Management, was excited with Lehigh’s finish as well. “Simply put, Lehigh put in an amazing showing versus two of the very best business schools in the country.”

The results of the contest were announced this morning on Facebook, in a press release, and on Corn’s blog, called ClearAM Ideas, where he wrote, “Lehigh, whose faculty was the most receptive to the contest, swept up the most spots with the best ideas. We are considering publishing indexes from some of the ideas of the second prize winners and honorable mentions, since we believe the investment theses were that good.”

Lehigh’s honorable mention winners included:

• Nathan Achezinski ’09 for a “leveraged” concept

• Greg Shurts ’08 for a concept around aluminum

• Jason Ackerman ’08 for a Green Index

• Dave Lutz ’08 for companies that aid Africa

• Daniel Scansaroli, IE GR, a two-time winner, for his currency concept and for his food staples index

• James Brink ’08 for a new take on inside ownership

• Jason Labret ’09 on companies that market to the GLBT (gay, lesbian, bisexual and transgender) communities

--Tom Yencho

Posted on Monday, January 07, 2008

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