Three courses where students manage real money in equity, hedge, and fixed income portfolios—and defend their investment strategies to professional investors
The School of Business at Ithaca College in New York State
The idea to offer students an immersive, long-term, real-world investment experience began in 2008 with a two-semester course on equity trading called “Real-Time Portfolio.” Created by Abraham Mulugetta, professor of finance and international business, the course includes a US$100,000 student-managed portfolio funded by an anonymous donor.
Last year, a gift from the same donor led to the creation of an introductory course with a lesser risk fixed income portfolio and an advanced course with a higher risk hedge fund. Throughout each course, each student team analyzes one industry sector, using Bloomberg terminals and financial software in the school’s Center for Trading and Analysis of Financial Instruments. Teams present their findings to the class, which votes on the next move—it takes a two-thirds vote to buy or sell a stock.
BOARD OF INVESTORS
Twice a year, students in all three courses defend their investment strategies to an advisory board of approximately 13 investors, often alums, and three professors. In the spring, board members travel to Ithaca to hear presentations; in the fall, students travel to Wall Street in New York City. While there, students visit the New York Stock Exchange and Wall Street firms.
The board has been instrumental in student learning in the course, says Mulugetta. Board members challenge students’ choices, introduce them to Wall Street, and give talks on investment topics.
FINDING THE NEXT CLASS
To attract talented students to the track, the school offers short workshops on investment basics to freshmen and sophomores. Offered the spring of students’ sophomore year, the fixed income course enrolls about 18 students, and they must apply to get in.
Mulugetta reviews applications with current students to choose the next class. Given the work they’ve put into managing the fund, it makes sense that students have a say in “hiring” their replacements, says Mulugetta. Outgoing students advise the incoming class on their strategies and recommendations. Successful students can progress to the equity fund course the spring of their junior year and to the hedge fund course in the fall of their senior year.
The courses now attract not only finance majors but also majors in music, communications, and history. The comprehensive, progressive nature of the courses builds excitement about investment among students and alumni alike, says dean Mary Ellen Zuckerman. So far, the students consistently have beaten the market.
The donor, a successful investor, has offered additional funds to expand the program further, including a second hedge fund section and supporting courses that do not include portfolios.
“The donor and Professor Mulugetta have a vision,” says Zuckerman. “In these courses, investors challenge students, students ask questions, they all talk to each other—everyone gets a phenomenal education about what it takes to work on Wall Street.”