Students in a Ted Rogers School of Management Finance course aren’t just playing with Monopoly money to learn about portfolio management and stock valuation. They have the opportunity to work on a real-money investment fund to gain hands-on experience.
The Ted Rogers School of Management Student Managed Investment Fund is a real-life investment fund managed by students in Applied Investment Management I (FIN65) and Applied Investment Management II (FIN75). The Fund has $500,000 seed capital and the investment objective is to generate a reasonable long-term return on the fund’s assets given suitable investment risks.
“The course hones a wide variety of skills and has taught me a lot about how heavily emotions play into investing since we were dealing with over $500K in real money,” says fourth-year Finance student Liam Hennessy.
Students feel a keen sense of responsibility and carefully steward their Fund’s performance.
Through this course, students are able to recommend asset allocation, buys, sells or holds, and the instructor executes the transactions. And like other real-life funds, there is a stated set of practices and principles that must be followed. The Fund is overseen by the Ryerson University CFO and the Ryerson University Finance committee, and it is closely monitored by the Dean.
Applied Investment Management Course
The Fund was launched in Fall 2020 to provide students with a highly experiential course that gives them the opportunity to learn about the pressures and requirements of work in Capital Markets.
The professionally-related elective courses are for students in the School of Business Management, School of Accounting and Finance and other programs. The two courses are run at the same time in the same room, and involve the investment and management functions associated with an investment fund. This includes not only analyzing and choosing investments, but also, especially in the second level, leading a team, portfolio management and asset allocation, governance and compliance and monitoring and reporting. Students are evaluated based on process and preparation, not the performance results of the investment.
Interested students cannot simply enrol in this course, rather they have to apply, and then a selection committee chooses the students with the best fit. There is some flexibility on the number of students in each level, but 22 for the first level and 11 for the second level is about the current allotment.
“We are looking for students who want to be there and are highly motivated, with a willingness to work and meet deadlines,” says Dr. Alan Kaplan, Associate Professor, Finance. “They need to have strong communication skills, both oral and written. They also need to have good teamwork skills, and ideally some leadership skills for the second level. And it is very helpful if they have a good background in Finance and Valuation.”
Dr. Kaplan says students are gaining many relevant skills through this course. “The first set is coming to your job every day, getting the work done on time and picking up the slack when somebody else doesn’t or can’t contribute,” he says. “A second set relates to developing and using teamwork and in some cases, leadership skills. This course involves more teamwork than any other course in the Finance department, and probably any other course at the Ted Rogers School.”
“Students also have to start looking at what other students are doing, and figure out how to review and critique other people’s work,” he adds. “They have to present, both orally and in writing on a regular basis. And, of course, they have to develop technical finance skills which will put them in good stead for employment purposes.”
The course is currently being taught by Stuart Morrow, Chief Investment Strategist, RBC PH&N Investment Counsel. He is also a Ted Rogers School graduate (BComm, 2002).
Morrow says that this is a tremendous opportunity for students who are interested. “You will gain practical knowledge of how a portfolio is managed, and get an opportunity to live through the experience of implementing your investment ideas in real-time,” he points out. “I cannot think of another course that employers in the industry would value more than this course.”
Students say they have enjoyed the opportunity to learn about investments on a deeper level due to the hands-on nature of the course. “In some of my other courses I have been tasked to choose investments and run a portfolio, however, it has always been on a short-term basis, and losing money was no issue as it has always been with virtual funds,” says Hennessy.
“Many employers and interviewers have been very inquisitive about this course and have mentioned that it is a very unique and valuable asset to have,” he explains. “This course offers a competitive advantage as it is seldom seen at a university level.”
Fourth-year Finance major Maximillian Czmielewski agrees. “The Applied Investment Management course gives students an opportunity to discover what it is truly like to run a real portfolio, managing real equities,” he explains.
“The tangible nature of the course offers more than just a theoretical approach to managing a portfolio, and instead emphasizes the most applicable aspects and tools a student will need if they are pursuing a career in capital markets,” says Czmielewski.
“From researching prospective companies to add to the fund to preparing pitch decks, presenting your recommendation and defending your rationale, the course equips students with universal skills critical not only for professionals in this field, but in virtually any career,” he explains.
Czmielewski adds that the course encouraged him to adapt, explore and problem-solve. “Company models can differ greatly by industry, and this required both myself and the teams I collaborate with to find new ways to approach the analysis of a potential investment and try methods we were unfamiliar with,” he says. “Overall, the collaboration, intensity and self-fulfilment the course provides is unmatched.”
Learning from industry experts
Students have been able to learn from industry experts like Morrow, who has been working in the sector for nearly 20 years. “I have been able to share some of my own experiences as a former portfolio manager/equity analyst, and now as an investment strategist with them to develop an investment philosophy and process,” he says.
“In this way, the student investment team has been able to experience what it’s like to work on an investment team on Bay Street or Wall Street,” Morrow points out. “The students have all worked tremendously hard over the last four to five months to bring the fund up to fully invested status. Their dedication to the process and to learning more about equity analysis, risk management and total portfolio management has been impressive.”
In addition, classes are augmented with visits by and connections to industry experts. Over the last year, the class has hosted many guest speakers, such as Melanie Adams (VP & Head, Corporate Governance & Responsible Investment, RBC Global Asset Management), Massimo Ceschia (CFO, Scotia Capital Markets), Andre Lewis (Managing Director, Central 1 Credit Union), Mimi Majumder (Associate Vice President, Manulife Investment Management) and Daniel Nieto (CEO, Kalsa Capital).
The guest speakers have discussed real-life issues that arise with investing, such as compliance and Environmental, Social & Governance (ESG) considerations, as well as other relevant topics such as technology investing.