Student Managed Investment Fund Teaches Real-World Finance Lessons—And Gives Great Dividends

Monday, January 27, 2020

Person managing stocks on a cell phone. Photo by www.distel.com
begin quoteThis class is just one of the many ways that we ensure our students are being taught lessons that will truly resonate with them while building skills that will make them competitive candidates for jobs in the financial industry upon graduating.

What better way to learn about stocks and financial markets than to manage an actual stock portfolio? In FINA 410 Student Managed Investment Fund, undergraduate students make recommendations for an investment portfolio with actual money as they put into practice investment concepts and learn about the psychology and mechanics of investment decisions. The class is funded by an endowment from the M&T Foundation, which also generously gave a $1.1 million endowment to support the USD Student International Business Council.

Lecturer in Finance Andrew Macdonald teaches the class while also working as an investment manager at Brandes Investment Partners. “The students get to choose a publicly-traded company for the class’ main project, one that they think could be a good investment,” explains Macdonald. “They then work on researching the company, its industry and competitors.”

Having real-world investment experience gives Professor MacDonald the ability to guide the class through their decision making in a way that goes beyond the theories of a finance textbook. Drawing upon his prior research and CFA experience, he gives invaluable industry insights as students research investment options but admits he has a “value bias” which students should take into account.

Once students have aggregated their research, they build a recommended valuation for their selected company using a variety of financial methods. At the end of the semester, they present their company and valuation to the entire class. The big decision then follows. Where should the class invest its money? Based on the presentations, the students come together to decide if they want to purchase shares in one or multiple of the recommended companies. “If so, they figure out how the investment fits in the overall class portfolio,” shares Macdonald.

Any proceeds from the investment’s returns, over a certain percentage, get contributed to the USD School of Business budget. So there’s a lot of incentive to make wise investments -- and our students have proven that they’re making sound decisions. Since the fund’s inception in 2014, it’s grown 40 percent in value. 

“I really enjoyed how applicable this course was to careers in finance,” says Ryan Baumhof (Finance and Real Estate ‘20), who took the class last semester. “We had a lot of freedom to follow any publicly traded company and make an informed decision on investing.” 

The student-managed investment fund is an applied learning experience that teaches real-world skills that stand out on a resume and is an academic highlight for many of our students. “It’s imperative that our students learn skills in the classroom that are used in today’s financial workplace,” says Professor of Finance and former Finance Department Chair Shreesh Deshpande. “And this class is just one of the many ways that we ensure USD School of Business students are being taught lessons that will truly resonate with them while building skills that will make them competitive candidates for jobs in the financial industry upon graduating.”

Contact:

Renata Ramirez
renataramirez@sandiego.edu
(619) 260-4658