University of Southern California

Student Funds Get 34% and 32% Returns
June 3, 2011 • by News at Marshall

It is not unusual for business schools to provide asset management opportunities for their students. "Most MBA student-run investment funds have only one or two funds and less money to manage," said Associate Professor of Clinical Finance and Business Economics Mick Swartz, who for the past two years taught both the MBA investment fund class and the undergraduate course.

But at the USC Marshall Center for Investment Studies, students receive more assets to invest in a greater number of funds, as well as a strong alumni network to tap for advice. That advice and what they have learned in class has paid off.

This year, both the MBA and undergraduate portfolios met their benchmarks--which is the S&P-- a significant achievement considering the volatile economic climate in which they were investing.

Sixteen Marshall MBA students enrolled in the investment fund (called SIF) seminar and managed four funds: a large cap value fund (the Trojan Equity Fund), the Provident Midcap Growth fund, the California Small Cap Fund and the Fixed Income Fund. Two student investment funds managed by MBA students performed extremely well.

According to Swartz, the California Small Cap Fund (Brian Laks MBA ‘11, Steve Cho MBA ‘11, Amit Agrawal MBA ‘11 and Ye Fu MBA ‘11) had a return of 34% and outperformed the benchmark by 9%; the Large Cap Value Fund had a 15.5% return and beat its benchmark of 14.9; the Provident Growth Fund (David Lund MBA ‘11, David Lohrey MBA ‘11, David Hendricks MBA ‘12, Hari Seshadri MBA ‘11) had a 32.5% return and their benchmark had a 25% return, so they outperformed by 7.5%.

The profits from the SIF endowment are used to support MBA scholarships, and approximately 8-10 scholarships are awarded each year.

Since 2008, Marshall has also offered its undergraduate seniors an investment fund class. The USIF, or undergrad fund, is large cap only and is managed by 16 students.. "This year," said Swartz, "the undergraduate fund had a return 12.99% return over the last school year."

A fifth fund—the Global Equity Fund—will be added this summer, with initial funding provided by USC Marshall MBA alumnus David Iben and his wife, Nancy.

About the USC Marshall School of Business
Consistently ranked among the nation's premier schools, USC Marshall is internationally recognized for its emphasis on entrepreneurship and innovation, social responsibility and path-breaking research. Located in the heart of Los Angeles, one of the world's leading business centers and the U.S. gateway to the Pacific Rim, Marshall offers its 5,700-plus undergraduate and graduate students a unique world view and impressive global experiential opportunities. With an alumni community spanning 123 countries, USC Marshall students join a worldwide community of thought leaders who are redefining the way business works.