A measured approach to risk has so far paid off for the Saltus Grammar School senior team in the KPMG Investment Challenge.

At the halfway point in the six-month competition the team, known as the Bermuda Bankrupters, are in second place out of 20 having made a profit of 4.51 per cent with their stock market portfolio.

The school teams in the contest were each given an imaginary $100,000 in October to invest in the stock market. At the end of January the Bermuda Bankrupters had grown their portfolio value to $104,509.

The seven-strong team are using smartphone technology to obtain real-time data on what is happening on the markets.

However, staying on their toes was not enough to avoid incurring a $5,000 penalty during the past month. Part of their strategy is to have a cash pile ready to deploy when a suitable stock-buying opportunity arises. Unfortunately, during January, the group’s cash reserve broke through the $10,000 limit allowed by the competition rules, possibly as a result of dividend payments or stock fluctuations during the quarterly period of earnings announcements by companies.

The $5,000 penalty will be subtracted from the total value of the team’s portfolio at the end of the competition on April 24.

Saltus has three teams in this year’s competition.

The Bankrupters are five boys and two girls who are all senior year students. Each member was initially responsible for choosing a number of stocks and sending the details to the others for consideration.

They work as equals within the investment team. Daniel Oatley, 18, takes responsibility for organising fortnightly meetings to discuss stock picks and strategy.

The Bankrupters have studied companies’ strengths and weaknesses and have a portfolio that leans towards stocks with higher beta indicators — which generally means greater price volatility. Getting it right means greater profitability, but a wrong pick can drag things down.

Mr Oatley, 18, said that because the KPMG Investment Challenge covers only a short period of time (six months) it made sense to seek greater returns by choosing somewhat more volatile stocks than they might have opted for if they had been creating a more stable, long-term investment portfolio.

Biomedical and airline stocks have so far proven to be winners for the team, but shares of American electric car manufacturer Tesla have not performed as well as hoped.

The team stays in touch with what is happening in the markets by using apps on their smartphones. The real-time information allows them to make portfolio adjustments, sometimes at short notice.

Team members say they have benefited from the experience of managing a virtual portfolio.

Kyle Eve-Townsend, 17, said he had learned the importance of “looking around at all the outcomes”. He added: “It has shown me how to see the bigger picture.”

Danae Palanyandi, who hopes to enter the world of accounting, said: “I like the new experience with stocks, and as a team we communicate and work well.”

Scarlett Brash said she had benefited from working as part of a team, and added: “It has been a new opportunity for me and I’ve learned a lot about how to choose stocks.”

Mr Oatley said: “I’ve learned that holding on is often the key; that you don’t give up on a stock after a little downfall.” He said the team had shown they work well together.

Nicholas Araujo, said he had benefited from learning about weighing up risks and watching the stock market, while Jonathan Speight appreciated the knowledge and analytical skills he has gained through the challenge.

Seventh member Keenan Smith was not present when The Royal Gazette interviewed the team.

Last year’s Saltus senior team finished ninth in the contest, this year they are on track for a better position. Teacher Kalpana Gangwani said: “It is a great improvement. They have learned the lessons from last year and they have taken a serious interest in it this year.”

As of January 30, the leading team in the investment challenge was Bermuda Institute’s Tradewins, with a portfolio value of $116,786.