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Show Me the Money: Kogod Students Manage $300,000 Stock Portfolio

By Adrienne Frank

Facade of the New Kogod School of Business Building

(Photo: Jeff Watts)

Kogod’s stock is on the rise.

American University’s business school is going beyond textbooks to teach finance students the art of investing. The new Student Managed Investment Fund (SMIF), staffed by 18 aspiring analysts and money managers, boasts $300,000 in assets and a portfolio that includes such Wall Street darlings as Dell, 3M, and Procter and Gamble. 

The investment team is composed of master’s students and undergrads, all of whom are enrolled in a 500-level SMIF course, led by Phil English. Students are encouraged to take the class for several consecutive semesters, moving up the finance food chain each term, from analysts to fund managers to portfolio managers. Student accountants and economists round out the group, which is designed to mimic the structure of an asset management team at Fidelity or Vanguard.

Using Kogod’s state-of-the-art Financial Services and IT Lab, which offers access to real-time data feeds from Bloomberg and Thomson Reuters—the software used on Wall Street trading floors—the student analysts pitch an investment idea each week.

“Our universe of stocks is broad. We’re looking for a blend of growth and value,” explained English, a professor in the Department of Finance and Real Estate. Holdings must also mesh with the team’s long-term orientation and investor policy statement, which maps out guidelines for the fund. (For example, stocks must be tracked by well-known research firms rating agencies like Morningstar or Moody’s.)

“My job is to help students stay between the yellow lines—the rest is up to them,” said English, who also advised the student fund at Texas Tech. “Whenever students manage [university] money, the concern is always that they’re going to lose it. But in my experience, students are often more diligent than professional money managers.”

One week after the analysts pitch a stock, the class votes on the investment—and that’s when the fun begins, said English.

“This isn’t a rubber stamp process. There’s a lot of debate, which is great to watch, though I would love to see them get even more aggressive,” he said.

Once a stock is approved by the students, it’s submitted to an advisory board composed of Kogod professors Gerald Martin, Octavian Ionici, and English. If they give the investment a thumbs up, the students place a buy order.

Presently, the portfolio includes eight stocks; Coca-Cola is pending advisory board approval. English predicts that students will soon turn their attention to Japanese blue chips: solid companies beaten up in the short-term that will create value over time. The fund pursues a long-term investment strategy, with an average holding period of three to five years.

“Students won’t know the performance of their picks until well after they’ve graduated,” English explained. He hopes that, as SMIF membership grows, the group will create an alumni newsletter, keeping Kogod grads abreast of the fund’s returns.

In the short term, however, students are gaining valuable real-world experience.

“Each of us has a different style, but in general, we’re looking for high-quality businesses trading at attractive prices—that’s the art,” said portfolio manager Chris Baines, a second-year master’s in finance candidate. “I want to work in asset management, and I’m hopeful this experience will make me even more competitive.”

SMIF formed in fall 2010, using capital from Kogod’s operating budget and money previously managed by the undergrad and graduate finance clubs.

According to English, SMIF has also received several $10,000 gifts. He hopes the students will eventually have $1 million under management.

“In order to operate at that level, we need to have a very well-defined class and a solid performance history,” he said. “But I think we’re well on our way.”

Students interested in SMIF can contact Phil English at

Kogod SMIF Holdings

  • 3M Company (MMM)
  • Bemis (BMS)
  • Dell (DELL)
  • Goldman Sachs (GS)
  • Petrobras (PBR)
  • Procter and Gamble (PG)
  • Research In Motion (RIMM)
  • Under Armour (UA)
  • Pending: Coca-Cola (KO)