The fund, whose portfolio is currently comprised of about 40 stocks valued at more than $300,000, was raised by donors and is part of the College of Business Administration’s discretionary holdings. Through this experiential learning opportunity, students are charged with maintaining the fund’s health by analyzing and discussing stocks to buy and sell, conducting bottom-up business analyses and keeping close tabs on trends in the global economy.
Students collectively manage the fund over a two-year period of courses. In the first year, students gain valuable experience as equity analysts by learning how to select and value stocks and by presenting recommendations for the fund. In the second year, analysts transition into management roles such as sector manager, chief of research and chief risk officer.
Students, who may graduate with a specialization in mutual fund management, are charged with capital allocation responsibility that fosters their development into experienced mutual fund analysts.
The program emphasizes executing a smart investment strategy that yields long-term growth. “What it does is differentiate Northeastern graduate business students from the rest of the pack,” said finance professor Harlan Platt, who supervises the student group with Paul Bolster, the Donald F. Harding Professor of Finance and Insurance.
Graduate student Barry Gilbert, the fund’s managing director, said, “There’s no substitute for real-world experience, and that’s what managing this fund provides.”
In its first four years, the fund has outperformed its benchmark by 20 percent and won several awards for student-managed funds, Gilbert said.
Earlier this semester, the group held its annual meeting. Lawrence Rakers, MBA’93, a portfolio manager for Fidelity Investments, won the 2011 Investor of the Year Award. Graduate student Derek Archila earned the 2011 Student Analyst of the Year Award.
Archila, a sector manager who covers health care, technology and telecommunications for the fund, said analyzing stocks and being mentored by more experienced students in his first year prepared him well for taking on a bigger role.
Globalization, Archila said, is continually challenging business leaders and investors to think big picture about their investments. This mindset translates to the classroom, he said, where students discuss investments at the micro- and macro-levels.
“You must think outside the box when thinking of investments today,” Archila said. “You have to think globally because everything is interconnected.”