Learning the ins and outs of investing is critical for students interested in pursuing careers in portfolio management or related fields. Learning the ins and outs of investing and investing real money in real time, with real consequences, while still in college kicks the critical classroom know-how up a notch. Students involved in managing FGCU’s Eagle Fund know firsthand the value of real-world experience.
The Eagle Fund, seeded in 2007 with $200,000 – a portion coming from the FGCU Foundation and the rest from an anonymous donor – is a one-semester seminar in security analysis and portfolio management. Only after students have successfully completed the “Principles of Investment” and applied indicating how the seminar fits with their career objectives are they considered eligible to participate. Once chosen, the real work begins.
“It’s a lot of responsibility,” said Elizabeth Berg (’21, Management and Finance) of managing a portfolio now worth upward of $700,000. “At first, I was intimidated.”
But not for long, Berg said. Guidance from finance professors Travis Jones and Ronald Mushock together with the collaborative class format quickly replaced any tentativeness with a sense of self-assurance.
Students are divided into sectors – among them, health care, information technology, communications, energy and others. They investigate the viability of companies within their assigned sector. Then, each team presents the research results to the class. “We talk about what we’ve learned through our research and how a particular company relates to what we, as a portfolio management team, are trying to do,” said Berg, who belongs to the healthcare sector, responsible for researching pharma and biopharma companies and healthcare services.
Gavin Schell (’22, Finance) was a member of the information-technology sector, whose members looked at Facebook as one potential investment choice. “We understood the good valuation versus its competitors and at the time, Facebook was pretty cheap,” he said. “Once we identified good valuation, we looked for a story behind it. At the time of the purchase, Facebook was involved in an antitrust lawsuit. We discussed potential fallout if Facebook lost and felt, given the three tiers of the company – Instagram, WhatsApp and eCommerce – there was still a strong potential for the stock to increase in value.”
Their decision paid off. “We purchased Facebook at $290 a share,” Schell said, “and it quickly increased in value by 12 percent.”
One key to the students’ success is how they evaluate potential buys.
“We look at what the overall economy is doing,” Berg said. “And then we dive deep into the company’s financials. We look at what management is saying. We ask what the news outlets are saying. Lots of times, industry lets the computer do all the stock picking. We look at numbers first, but then we put the human eye on a situation.”
The human eye, for example, saw Workhorse as a financial risk but a great story. Workhorse was touted to be a shoo-in to win a multi-billion-dollar contract with the U.S. Post Office, which was considering switching its mail trucks to electric vehicles. “But once we looked into the numbers,” said Schell, “there were no earnings to speak of and, in our opinion, good story or not, it was not a good stock valuation wise.”
Another good decision. Workhorse did not win the contract, and its stock tanked.
Recently, Berg, together with five of her classmates (Schell, Jessica Villafuerte, Jade Twang, Casey Farrow and Josue Wong) presented their Eagle Fund portfolio review to the FGCU Foundation Finance Committee, sharing why they took a particular position and how the direction of the market factored into their decisions. The results are impressive.
“Year-to-date through April 30, our large cap blend portfolio gained 13.6 percent, outperforming our benchmark S&P 500 by 1.8 percent,” Berg said.
Professor Shelton Weeks, department chair, said, “Participation in the Eagle Fund seminar gives students the opportunity to have some very real experiential learning outcomes on their resumes. And that is especially important in today’s environment when, because of COVID, internships were not possible.”
“It’s phenomenal what the students have been able to achieve,” said Rochelle Jackson, FGCU assistant director of development. “The impact of this real-world experience is huge for the students.”
Additionally, FGCU is right up there with prestigious institutions like Harvard, Cornell and the University of Pennsylvania in offering students access to Bloomberg terminals. A highlight of a business education, use of a Bloomberg Terminal factors both into students’ successes and their future job marketability.
“Professor Mushock spent decades as a professional fund manager,” Berg said. “He guided us with a model he built inside Bloomberg. The model screens out stock based on various factors like momentum, volatility, valuation, quality. It then gives a list of all the companies in our universe that we want to research.”
“The experience that the students receive from their involvement with the Eagle Fund is outstanding,” said Thomas Moran, founder, CEO and senior portfolio manager of Moran Wealth Management in Naples. “FGCU is giving students the opportunity to apply the principles they learn in class in a real-world setting. Not only do the students get a chance to apply their newly learned skills, but they also learn how to work in a team environment. This experience truly puts these students well ahead of many of their peers attending other universities.”