Business students support scholarships through investment fund
Over recent years, the stock market has shown both bull and bear tendencies. The pandemic, in particular, has been a challenging time for fund managers, having to respond to volatility in the securities market and the panic-induced market sell-off.
Despite its challenges, it was also the ideal learning environment for students at the University of Sydney Business School aspiring to a career in portfolio management.
Moving beyond lectures and trading simulations, the business school offers the opportunity for students to apply their learnings to the management of real stocks through the Student Managed Investment Fund (SMIF).
One such student is third year Bachelor of Commerce and Bachelor of Advanced Studies student, Andre Thomas, who aims to start his career by working as an investment banking analyst.
I took this course knowing I would be stimulated by real world events and market changes that would challenge me to form my own views and build on my knowledge base.
Jiri Svec, Senior Lecturer and academic mentor for the course, recalls the "blank look" on students' faces as their portfolio dropped close to 30% over several weeks, triggered by the pandemic. But the portfolio recovered quickly, and students were able to enjoy decent gains by the end of the year.
Real investments provide students with a high degree of decision-making responsibility that cannot be easily replicated with other modes of teaching, such as the opportunity to practice real-life shareholder advocacy and to influence the direction of firms.
The SMIF was established in March 2017 to provide students with real-world experience. Another aspirational purpose was built into the design, too, that of repurposing a portion of the profits to fund student scholarships.
To ensure this philanthropic arm could be sustained long-term, the scholarships were to begin only after the total value of the portfolio had reached $500,000.
All of this was made possible through a generous donation by global investment firm TDM Growth Partners, who also kindly provide guest lectures to the students.
From 2022, the sustained effort and savvy investment choices of current students will help others, like them, achieve their dreams of studying at the University of Sydney.
"The philanthropic element of the portfolio is a rewarding experience," says Thomas.
It has provided an additional motivation to maximise my contribution to the fund, powered by the knowledge that my efforts could directly impact the study experience of a future student at the University.
Svec agrees that the added level of generosity and responsibility gives students a higher purpose and sense of ownership.
Along with co-mentor and lecturer Hamish Malloch, Svec is hopeful of the fund's potential to be a powerful driver of social change.
"While the fund already has the capacity to support several ongoing scholarships from its existing cash flow and profits," he notes, "I am hopeful that as it grows, and the alumni promote its benefits in the industry, we will be able to attract further gifts and support more students."