The Krause Challenge began in 1998 when W.A. Krause, provided a one-time gift of $400,000, [image-nocss] which was divided equally among the University of Northern Iowa, Drake University, Iowa State University and the University of Iowa to create a program for finance students to personally experience stock market fluctuations and portfolio management. Every school competes to deliver the highest return on their portfolio and for the title of Krause Challenge winner.
Each year, the finance class or club at all universities learn about the stock market, review individual company stocks and then invest the program money into the stock market. The Krause Challenge is an ongoing program, which allows classes to re-invest the money from year to year. The only guideline is that 10 percent of the total portfolio has to be invested in Iowa-based companies.
"During a year with unstable and unreliable markets, students at all four schools were presented with a great learning opportunity as they were exposed to investing and the stock market," said Kyle J. Krause, Kum & Go president and CEO. "Congratulations to UNI for weathering the storm."
The results for the four schools from August 31, 2008 through March 31, 2009 are as follows:
Northern Iowa: (27.77%) return; portfolio performance from $124,644.33 to $90,025.52. Iowa: (31.83%) return; portfolio performance from $ 209,967.7 to $143,132.50. Drake: (36.22%) return; portfolio performance from $221,038.84 to $140,973.62. Iowa State: (42.50%) return; portfolio performance from $173,510.56 to $99,768.68. "This year has been truly a challenging time for any investor and it was also true for our students in the Krause Challenge," said Carl Schweser Financial Analysis Professor Mir Zaman. "Given the state of the stock market, the students managing the Krause portfolio implemented a two-pronged strategy. First, they analyzed and invested in defensive stocks to limit losses. Second, the students identified and invested in stocks of companies which were trading at a significant discount relative to their true value. Our students attempted to exploit these opportunities and the results of the Krause Challenge 2009 suggest they were successful in their endeavor," Zaman said.
Neil Mulholland, student director for the UNI Krause Challenge group, told Krause in accepting the award, "The Krause Challenge gives us the chance to apply concepts we've learned at UNI. We'll continue to benefit from this experience for a long time to come. We thank you for the opportunity."
UNI Business Dean Farzad Moussavi called the Krause Challenge program the "perfect gift" in that it is ongoing, provides meaningful experience and asks students to give effort in return. "Regardless of who wins each year, all of the students who participate benefit from the experience," he said.
"I am honored and amazed to see how the Krause Challenge was embraced by the four schools. When we started the Krause Challenge, we had no idea how much it would impact the universities' finance programs," said W.A. Krause. "The Krause Challenge is now one of, if not the premiere, finance class at all participating universities. We're thrilled to see so many students learning and growing through the program."
The $10,000 award will go toward supporting the Carl Schweser Financial Analysis review program in UNI's College of Business Administration.
Kum & Go has more than 431 convenience stores in 12 states (Iowa, Arkansas, Colorado, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, Wyoming and Wisconsin).
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