2023 2023: UMassD Student Investment Fund performs best in UMass system

Fund beats S&P 500 by 7.12%, up 26.71% in FY23

Undergraduate students who took Finance 301: Financial Analysis for the UMassD Student Managed Fund last academic year can add a note in their résumés that the real money they managed performed 7.12% better than the S&P 500, the best performance in the UMass system.

In 2008, the UMass Foundation, which oversees the five-campus system's endowment, carved out real $25,000 slices for student funds at UMass Amherst, Boston, Dartmouth, and Lowell to manage. Today, UMass Dartmouth's portfolio sits at just under $170,000. For reference, $25,000 placed in the S&P 500 benchmark in 2008 would equate to about $109,000 today.

Once the account reaches a certain threshold, the UMass Foundation will take a share of the gains to be used for things like financial aid and scholarships. In effect, the money UMassD students make in the fund will help finance future UMassD students' educations.

"This is a great experience for any student interested in finance, the economy, or their own future retirement portfolio," said Professor of Finance, Michael H. Anderson. "This class isn't exclusive to any major or class year. The class meets in the Bloomberg lab and uses eight Bloomberg Terminals; however, that lab is open to all UMassD students. On their first day of college, any undergraduate student can get access to the same technology that powers Wall Street."

"This is a great experience for any student interested in finance, the economy, or their own future retirement portfolio. This class isn't exclusive to any major or class year. On their first day of college, any undergraduate student can get access to the same technology that powers Wall Street."

UMassD's student fund had previously come in second place overall for the past four years, placing first among undergraduate firms in FY 2020 and 2021. Producing a 26.71% return, this is the second time the UMassD Student Managed Fund has come in first place overall (previously in FY 2015). First- and second-place finishers receive an extra $5,000 added into the fund.

A 1.5-credit course that meets once a week on Wednesday afternoons, FIN 301 is intended to be taken twice, with the idea being that students get "promoted" from a junior analyst in their first semester to a senior analyst in their second semester of the course. If students enjoy the experience, they can take the class for audit (without credit) developing decision-making and leadership skills as well as padding their résumés.

"I follow a Warren Buffet-style top-down fundamental analysis," said Anderson. "The class considers the direction of the general economy, then gets divided into four teams who each pick an industry expected to perform well, look at companies' financials, and suggest buying or selling current inventory in that space. I try to offer guidance on request, preferring to moderate the conversation.

"We're looking to be 'buy-and-hold value investors.' Shorting, using margin, and trading options are not permitted. After our meetings on Wednesdays, trades in long positions in equities, mutual funds, and ETFs happen on Thursday mornings. This approach is very relevant for a college endowment as well as an individual’s 401(k). The hope is that this teaches our students to be responsible money managers."

Potentially any undergraduate student, regardless of major or class year, can enroll in FIN 301 for the spring 2024 semester with permission of the instructor. Interested students should contact their academic advisor or Professor Anderson directly.