As the COVID-19 pandemic spread around the globe during the past few months, the stock market plummeted to new lows creating havoc for investors and financial planners. During this unprecedented time, a team of students at Montgomery County Community College competed with more than 100 college teams on an international stage in an investment competition. The team achieved fourth place for its portfolio’s performance and third place for its risk adjustment performance.

Sponsored by The Vanguard Group, an investment management company based in Malvern, Pa., and hosted by Temple University’s Fox School of Business, the annual Vanguard Exchange Traded Funds (ETF) Challenge requires teams of four students to manage a portfolio of $1 million for three months. The top 15 finalists are chosen based upon their portfolios’ overall performance for the finals. Each team then presents its investment strategy before a combined panel of Vanguard and Temple representatives, who select the top two teams.

“We were the only community college in the competition,” said Bradley Lawrence, of Devon, Pa., one of the MCCC team members. “There were teams from Wharton (School of the University of Pennsylvania), Cornell, Columbia, France, Spain and Canada. For most of the competition, we were in first place.”

MCCC Finance & Management Instructor Damon Gray, who also advises Phi Beta Lambda (PBL), the professional business leadership club at MCCC, shared the information about the competition with students in his classes and PBL. In addition to Lawrence, the team members included Morgan Holland and Robert Woodson, of Norristown, and Andres Maldonado, of Lansdale.

“I’m very proud of these students and how well they collaborated,” said Gray, who has worked in the financial services industry for over 30 years. “I told them, ‘this is your portfolio – it’s on you.’ I guided them and answered their questions, but I didn’t tell them what to do. They had to figure it out and they did – they crushed it.”

Both Holland and Maldonado were new to the investment arena, which is exactly why they decided to participate in the competition.

Holland is a Business Administration major at MCCC, and plans to transfer to West Chester University to study Accounting after she finishes the fall semester and graduates from MCCC. She currently serves as the PBL treasurer..

“I was interested in learning about ETFs and investments for my career, and I thought this was the perfect opportunity to do so,” Holland said.

Similarly, Maldonado, who also is a Business Administration major, viewed the competition to enhance his education and experience.

“I had no experience with investments, so I had to do a lot of research to learn about ETFs,” said Maldonado, who is in his second semester at MCCC. “The biggest lesson I learned is to be patient and not be greedy. You can’t get rich fast.”

In early February, the team met in person once a week and then virtually after MCCC’s physical campuses closed following Pennsylvania Gov. Tom Wolf’s directive. Through group texting, they consulted with each other, discussed their strategy and made their decisions. Given the COVID-19 pandemic and its impact, the team agreed to focus on a strategy to strive for a return of capital instead of a return on capital.

“When we first met, we talked about risk tolerance. We knew the coronavirus was emerging in China, and we thought its impact on the U.S. market would be pretty bad,” said Woodson, a Business Administration major, who is in his last semester at MCCC. “We knew we wouldn’t be making money, so we focused on losing as little money as possible.” He plans to transfer to Temple University in the fall to major in Accounting.

Lawrence, who had a summer internship with Brandywine Global Investment Management in Philadelphia last year, was eager to get involved in this competition to use his knowledge from that experience and from what he learned at Montco. He plans to attend the College of Professional Studies at Villanova University in the fall to major in Business Leadership with a minor in Communications.

“We took a top-down, macro look at the economy and the reactions to COVID-19,” Lawrence said. “We watched the news and the world picture.”

After assessing their options, the team decided it was best to keep $200,000 to $300,000 in cash while investing the rest of the money in U.S. Treasury bonds, a haven that they thought would offer the best protection.

“At one point, we were showing a profit at $1.1 million, putting us in first place,” Lawrence said. “Most of the schools were at a 20 to 30 percent decrease. Overall, we were down an average of 2.6 percent, finishing with a portfolio value of $974,000.”

After learning that their portfolio’s results earned fourth place in the competition, the students met through a Zoom video conference meeting to prepare their presentation about the strategy for their portfolio and its performance for the panel of Vanguard and Temple representatives.

“When I read their presentation, it made me smile,” Gray said. “You never know if students are listening to what you’re teaching in class, but it was obvious they were. The team itself was an interesting dynamic of experience and diversity, yet they worked well together and learned from each other. They are a testament to what we do at the College.”

Although the University of Ottawa of Ontario, Canada, won in the undergraduate division and Grenoble IAE of France won in the graduate school division, the students were pleased with placing fourth among more than 100 teams. Most of all, they value what they learned and how it will help them in their careers and personal lives.

“This was a great opportunity, and I learned a lot about the market and investing,” said Holland. “Professor Gray was supportive, but he didn’t give us the answers. He made us make the decisions.”

“It was definitely a great experience,” Woodson said. “It will help me in my career as an accountant and personally with investing.”

 “Our team was awesome, and I was able to step into more of a leadership role because of my internship experience,” said Lawrence, who enjoyed sharing his knowledge to help his teammates.

“Montco provides great opportunities for students who are willing to put in the extra time and effort,” said Maldonado, who eventually wants to work for Vanguard as a financial advisor/investor. “This was good practice and I learned about managing risks. Life is all about managing risks.”