REAL EXPERIENCE USING REAL MONEY

By Madison Stoks

A pioneering initiative of real-world investment experience is forthcoming this fall.

The Fogelman College of Business & Economics Student Managed Investment Portfolio (SMIP), which launches in fall 2022, will implement academic rigor and a more hands-on practice of data analytics, equity research, trading, valuation predictions and machine learning. Our Department of Finance, Insurance and Real Estate (FIR) will be involved in teaching the initial courses and guiding and executing all portfolio buy and sell decisions within the new brokerage account.

Over 7,000 listed firms and 7,600 exchange traded funds will be at the fingertips of our students through Wharton Research Data Services and company-specific risk premium programming. The acquired data management skills will aid students to sort, screen and narrow down potential investments to a top-hundred list of candidates. Each company in this list will be assigned to a group of two students, where one will act as the plaintiff, analyzing its risk, and the other as the defendant, who researches the potential reward. “This student managed investment portfolio will have more flexibility because it’s internally driven and students can propose to get guidelines changed,” explained FIR department chair Dr. Pankaj Jain.” At semester end, similar to a court ruling, the plaintiff and defendant will propose their detailed findings to the jury, made up of the FIR advisory board, SMIP members and donors. Upon the jury’s decision, the winning student will get to buy or sell the proposed trade under faculty supervision.

This flagship program is an inviting initiative where students, staff, faculty and donors work collaboratively with a technically advanced learning environment in mind. As some initial funds have already been secured, FCBE is striving to obtain $250,000 before fall 2023. “Being involved in an investment club when I was in graduate school was one of the most effective ways to synthesize what I was learning in the classroom with real world experience,” noted Mark Christopher, a partner at Hg Capital. “I am really excited to be involved with this opportunity and believe this is a powerful way to enhance the student experience.”

Assuming sufficient earnings, up to 4% of the fund’s capital will help to create a means for student scholarships, faculty mentor stipends, research and performance awards, auxiliary services, subscriptions and data expenditures, travel and research conference expenditures and association memberships. Above that 4%, further SMIP earnings will be reinvested back into the endowment to promote further growth and offset any losses in prior years.

To learn more about how to support the Student Managed Investment Portfolio program, scan the QR code.