St Agnes aim for winning strategy in stock challenge

WEDNESDAY, NOVEMBER 16: The KPMG Investment Challenge kicked-off for its seventh year of competition with 14 teams from eight local high schools submitting their initial investment portfolios.

It promises to be a bumpy ride on the stock market, especially with the Euro crisis, but that does not hold any terrors for the three members of ‘Limitless Investments’, the Mount Saint Agnes investment team in the KPMG Senior School Investment Challenge.

The dauntless three: David Thomas, Chelsy Furtado and Owen Chisnall, all 17-year-olds, told the Bermuda Sun that they have been researching the trends in the market and believe they can come up with a winning strategy.

“Our capacity for success is limitless”, a confident David Thomas said.

Owen Chisnall explained some of the thinking behind their investment strategy. “We are not exposed to European stocks so much,” he said. “We have North American and some local stocks as well.”

It seems clear that the steadying influence in the team is Chelsy Furtado, who quietly keeps the team grounded. “That is why you have got have a girl in the team,” said Chelsy.

Teacher Rui DeSa spoke highly of the team saying they are bright students and he is confident they will succeed no matter what they do.

Last year Mount Saint Agnes team finished second, and they only had two in the team, although Mr DeSa hinted that this year there could be additional members.

According to KPMG, the initial portfolios of all teams are highly concentrated in United States, Canadian and Bermudian securities, with minor positions ranging from South Africa to the Netherlands.

All teams are required to hold at least one Bermudian company in their portfolios, with most teams opting for well-known names such as Bank of N.T. Butterfield, Argus Group Holdings and BF&M Ltd.

The teams have chosen to invest primarily in common stocks with other minimal investments in ADRs (American Depository Receipts) and GDR’s (Global Depository Receipts).

Across industry sectors, the portfolios are very well diversified with the Consumer products, Energy and Technology sectors leading the way.

Summary of rules

• No more than 10 per cent of your portfolio can be held in cash at any time.
• Each portfolio must hold a minimum of 10 securities and no more than 20 securities at any time.
• To enhance the challenge’s similarities to actual stock market trading, teams may execute trades on any day during the month on which the permitted exchanges are open.
• Teams are limited to 10 trades (purchases and sales combined) each month. 
• Each portfolio must hold at least one security in a Bermuda company listed on the Bermuda Stock Exchange.
• All trades must be made in whole shares, no fractional shares are permitted.
• No more than 50 per cent of the positions in a portfolio may be traded in any month.
• No short selling of securities is permitted .
• Only certain exchanges are permitted for investing (see full version of rules).
• Any purchases exceeding the available cash balance after all sales transactions have been processed will not be considered in the portfolio.
• Purchases and sales transactions that would result in the portfolio holding less than 10 or more than 20 securities will not be posted.