Student Managed Fund Best in UMass System Once Again; Graduate Team Starts in Spring

Students in the fund course present their analysis work Image by Ed Brennen
Students in this fall's Student Managed Fund course present their analysis of Berkshire Hathaway during a recent class in the Pulichino Tong Business Center's trading room.

By Ed Brennen

The process is always more important than the result for Manning School of Business students competing in the annual Student Managed Fund challenge. But when the result is another first-place finish among five teams from the UMass system, that’s an added bonus for the résumés.

For the fourth time in 10 years, UMass Lowell’s Student Managed Fund team won the annual investing competition among the UMass campuses.

Consisting of 30 finance students enrolled in Asst. Teaching Prof. Chan-Wung Kim’s Student Managed Fund course last fall, the team received a certificate – and a $5,000 top prize to invest back into the funds – during a recent luncheon at the UMass Club in Boston.

“I told the students, ‘I don’t care how your stock pick performs, I want you to analyze it properly,’” says Kim, who gives his students all the credit for the winning results. “They picked the stocks; I just taught them. This is a wonderful moment for our students to apply what they have learned in class and use it for real analysis.”

“Anyone who’s part of the fund can say they’ve helped manage money and they’ve analyzed real companies. And they can show their work.” -Senior Matt Lovely

Launched by the UMass Foundation in 2008, the competition gives teams from the Amherst, Boston, Dartmouth and Lowell campuses an opportunity to research and select stocks for investment during the academic year, using real money from the existing funds. The investment returns at the end of the year are benchmarked against the return on S&P 500 index during the same period.

The stocks picked last fall by the Manning School team for the fiscal year ending June 30 gained an impressive 21.19 percent. That was 6.82 percent higher than the S&P 500 benchmark performance of 14.37 percent. UMass Boston finished second at 19.14 percent (4.77 percent over the benchmark).

Since starting with $25,000 in seed money from the UMass Foundation a decade ago under the direction of Assoc. Prof. Ravi Jain, UML’s fund has grown by 460 percent to almost $140,000.

Senior business administration major Matt Lovely, who gave a presentation on the UML team’s winning performance at the UMass Club luncheon, says it was a combination of quantitative and qualitative stock analysis that made the difference in fiscal year 2018.

“We’re really proud of the fact that we used good old-fashioned fundamental analysis in picking stocks,” says Lovely, a Foxboro native whose concentrations are in finance and management information systems. “We analyzed individual companies using quantitative methods like free cash flow analysis and the dividend discount model. But on top of all this, we had a lot of qualitative analysis into companies’ competitive advantage, their markets and their leadership.”

Student Managed Fund members pose at the UMass Club Image by courtesy
Student Managed Fund members, along with Assoc. Prof. Ravi Jain, right, are recognized for their victory at the UMass Club in Boston.

Kim, who has taught the three-credit course for the past five years, says the addition of the Bloomberg terminals in the Pulichino Tong Business Center’s trading room has greatly improved students’ analysis skills by giving them access to more real-time data than ever.

Lovely, who worked in digital analytics at JPMorgan Chase & Co. last summer in New York, agrees.

“The Bloomberg terminal is an indispensable piece of equipment, especially for finance students,” he says. “To be able to get hands-on experience with that and apply it to your analysis, it takes what you’re doing to the next level.”

At the end of the course, students write a detailed analysis report on their investments. The course also includes visits to companies and stock exchanges. Twice, students have had the opportunity to travel with Jain to Omaha, Neb., to meet billionaire investor Warren Buffett, most recently last winter.

Jain, who taught the course for five years (with three victories) before handing it over to Kim, resumed teaching the class this fall. Jain also recently received $25,000 from the UMass Foundation to start a Graduate Student Managed Fund course in the spring.

“We hope that it will enhance the experience for our M.S. in Finance students and other interested graduate students,” Jain says.

Lovely, who will graduate in December and plans to work in the investment management industry, says the intensive, time-consuming work that went into the Student Managed Fund will end up paying the biggest dividends for students.

“When you’re interviewing for jobs, they’re going to ask to see a piece of analysis that you’ve done,” he says. “Anyone who’s part of the fund can say they’ve helped manage money and they’ve analyzed real companies. And they can show their work, which is really important.”