Student Investment Fund Profits Through Hands-on Experience
Students are selected through a formal application process and learn how to analyze potential investments using the same financial techniques professional investors use.
Students at University of the Pacific earn real-world experience that better prepares them for life after college, but students in the Eberhardt School of Business are earning more - a 12.3 percent return on investments.
The students are in the Student Investment Fund, a business course for MBA and undergraduate students. At Pacific, the students invest the money, monitor their returns, and report their success - or failure - at the end of the year. To learn more about investing, the class has visited the Pacific Stock Exchange, the Federal Reserve Bank of San Francisco and the Dodge & Cox Funds. And they also use a Bloomberg Terminal, an interactive software program which allows them to receive live information about companies that trade on the worldwide stock exchanges, monitor the value of the U.S. dollar against other currencies minute-by-minute, research investment funds and keep a watch on global commodity prices.
The class also has to respond to a "board of directors," consisting of Eberhardt's dean, the vice president of business and finance for Pacific, and four investment professionals. Students dress professionally for all public events, meetings and presentations to prepare for the real careers they get after graduation. They also have to file an annual report of their investment activities and results, and their work is audited by an independent accounting firm, just like Wall Street investment funds are required to do.
In other words, they live the life of a high-end financial wizard before they complete their degree.
"The SIF course offered me a unique opportunity in the world of investing," said Nataly Teixeira, a senior undergraduate student with a concentration in Finance. "Using real money puts things into perspective. It is no longer another class exercise it is the real world with investors depending on you to manage their assets with diligence. This class didn't just teach me how to analyze individual stock performance, more importantly it taught me skills to effectively manage portfolios by incorporating our group's strength's and using our intelligence together with the market insight in order to capture investment opportunities and manage risk."
The fund was established in 2007 with a $1 million donation from benefactor and Stockton businessman Doug Eberhardt. Since its inception, it has received another $1 million in donations from Pacific's Board of Regents. At the end of each year, the students are required to return part of the investment returns to Pacific where it is used to fund the Eberhardt School of Business, the Speech-Language Pathology program, and the men's water polo team.
So far, giving money back to the University each year has not been a problem, as the students have managed to outpace the Standard & Poor's 500 and the Russell Midcap Index benchmark and have yet to post a loss, even during the worst years of the recession. Since 2007, the students have returned more than $175,000 to the University. Today, the fund is valued at about $2.3 million - a 40 percent growth in four years - and is considered to be one of the three largest student investment funds in the West, earning several awards along the way.