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LSU students interested in careers in wealth management are making a sound
investment in their education by completing a course in security analysis and
portfolio management, which allows them to directly manage and invest up to
$1 million.
The Student Managed Investment Fund (SMIF) – also known as the Geaux
Fund – at the E. J. Ourso College of Business’ Department of Finance
provides students with experience in performing investment research, investing
money and managing a portfolio. Students serve as analysts and managers, and
are expected to generate investment ideas, research investment opportunities,
and make recommendations and presentations based on their analysis.
Both the SMIF fund and the corresponding investments course were started
in spring 2005 through a generous $1 million allotment from the LSU Foundation,
a nonprofit foundation composed of business, professional, and civic leaders
concerned with the advancement of LSU.
William R. Lane, chair of the finance department, said the department and
the university benefit from having the student managed fund available to interested
students. He says it helps to increase LSU’s national reputation of producing
quality finance graduates.
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Walter Morales, Department of Finance |
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“Because the money is managed entirely by students, we have created
an exceptional learning environment that is unequaled by a majority of other
universities. This places our student’s leagues above the competition
in the job market. We want to thank the LSU Foundation for making this happen.”
The student managed fund is an all-equity account currently investing in
the Standards & Poor’s 100, which is an index consisting of the largest
market capitalized U.S. firms. The primary investment objective is to achieve
long-term capital growth and to exceed the total return of the S&P 100
index.
To date, students have outperformed their benchmark.
Students interested in investments can enroll in Finance 3826 as a prerequisite.
The student managed investment fund course is taught by instructor of finance
at the E. J. Ourso College, Walter Morales.
“The purpose of the fund is to bridge the disconnect between the academic
and professional worlds,” said Morales. “My role is as a facilitator,
not as a manager of the money. It is truly a student-managed fund. If the students
believe purchasing a certain stock is the right thing to do, the faculty wants
to ensure their methodology and rationale are sound, and that the amount of
money being invested in one stock is considered prudent. We ensure there is
an element of diversification, the students make the decision.” Those
decisions are then passed on to the LSU Foundation to make the investments.
Students currently enrolled in the class cite the practical experience they
gain as a real-world advantage. The experience, they say, makes them stronger
job candidates in the investment world.
Flores MBA and SMIF fund participant Amanda d’Aquin said that in addition
to learning about investing techniques and portfolio management, she appreciates
that the class is set up to look and act like an actual investing firm.
“My goal is to pursue a career in money management, and my experience
in this course has prepared me in so many ways to enter my field with confidence.
I can truly say that I know how an investing firm operates and makes critical
decisions. Not only did I gain tremendous portfolio management experience,
I got a resume builder that gives me a competitive advantage above other MBA
graduates around the nation.”
Morales said the fund will become an even greater advantage for students
who enroll in the course. He and the finance department are taking steps to
improve the quality of the course and further reflect the environment of an
investment firm.
“Student-managed funds are where most business programs will be going
in the future, in order to produce quality graduates. We want to ensure that
our students are not only leading the charge, but staying ahead of everyone
else,” he said.
Next semester, Morales says he and the finance department hope to broaden
the scope of the fund to the S&P 500, and beyond, to explore new companies
and strategies with the students. He also said he plans to appoint graduate-level
students as money managers, and undergraduate students as financial analysts.
For more information on the SMIF fund, visit www.bus.lsu.edu/finance/smifund,
or contact the Finance Department at 225-578-6291.
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