The Marshall School of Business announced a $3 million gift last week from Van Eck Global, a New York-based investment management firm. The gift will be allocated to support a student-run investment fund focused on asset allocation by utilizing exchange-traded funds, which will be administered by Marshall’s Center for Investment Studies.
Recently, the Undergraduate Student Investment Fund held an event attended by more than 100 students that aimed to educate students on the background of USIF, how to research and pitch stocks and general investment methodologies. Most of the USIF students will start careers in investment banking, portfolio management or equity research upon graduation this spring.
“We are very excited to forge strong links between Van Eck Global and the USC Marshall School of Business and the Center for Investment Studies,” said Jan van Eck, CEO, director and president of Van Eck Global, in a university press release. “We hope this gift will encourage Marshall students to pursue careers in the investment community.”
A select group of seniors are already getting the experience of managing a $1 million fund focused on equity investments for the university’s endowment as part of the USIF. The student portfolio managers are carefully selected through an application process; each is responsible for covering two sectors of stocks and pitching stocks at one of the four yearly meetings.
Members of USIF are also enrolled in a capstone class, Advanced Practicum in Portfolio Management, which is taught by professor Suh-Pyng Ku, who is also the director of the Center for Investment Studies.
Kathleen Siswanto, a senior majoring in business administration and biological sciences, commented on the merits of the USIF program.
“USIF has the reputation for attracting motivated students who are genuinely interested in understanding the markets,” Siswanto said. “This class is not for the faint [of] heart; Professor Ku will continuously challenge your ideas to make you a more thoughtful investor.”
Students are also exposed to the operational procedures of running a million-dollar fund. Each student must be involved in one of the following facets of running the fund: completion fund & risk management, portfolio reporting & accounting, trade execution, operations & compliance, marketing & recruiting and special projects.
Zach Bergenfeld, a senior majoring in business administration, said he appreciates Marshall’s commitment to practical experience.
“Marshall really prides experiential learning and hands-on learning … ‘what other way is there to manage a million dollars of real money if you’re passionate about investing in finance and then finance in general?’” Bergenfeld said.
The gift from van Eck, whose wife Cynthia graduated from USC in 1986, will allow future students to expand their investing horizon outside of traditional stocks and into exchange-traded funds.
ETFs differ from equity investments in that they provide an investor the opportunity to invest in a basket of securities that can help aid in diversification and thus lower risk. The ETF industry is expected to reach nearly $5 trillion in assets under management by 2020 according to a report by professional services firm PwC.
“This is a very significant gift for our student investment fund program. I’m thrilled for the students’ expanded learning opportunities in ETF asset allocation across a wide range of asset classes,” Ku added in a university press release.