Learning the trade: Student Applied Portfolio class and the SELL

As part of the Student Applied Portfolio class, select seniors at Loyola have the rare opportunity to research and make recommendations on which stocks to trade in an effort to increase the value in a portion of Loyola’s endowment funds.

Known as the Student-Managed Sellinger Applied Portfolio Fund (or SAP Fund), the program is funded with $500,000 of Loyola endowment money and run by the guidelines of the endowment.

“Students are not given ‘carte blanche’ to do whatever they want. It’s carefully structured,” says Frank D’Souza, Ph.D., the associate professor of finance who teaches the class.

D’Souza explains that the SAP Fund is monitored by a number of people—including those in the treasury department, the finance office, and the office of advancement.

“It’s a professional experience because students are given leeway to act as managers and make recommendations. Everything that they do is vetted; all the trades are run through the finance office, but the students lead the class,” explains D’Souza.

“It’s such a different experience from the regular undergraduate class. In a similar class, you either write reports or you take exams. Even in this, you do have testing, but it’s more applied.”

Students must apply to take the course—and the competition is fierce. Only 20 students are accepted into the class.

Students work in the Student Experiential Learning Lab (SELL). To conduct research, they become certified in and use widely known databases such as Bloomberg Professional, Morningstar Direct, and Capital IQ.

Just as they would in the real world, students are accessing real-time data, news, and analytics to help them determine what they will recommend for the portfolio.

Another benefit of this class is that the experience stands out on resumes. Potential employers recognize that Loyola students won’t need to be trained on the professional databases. They’ve already used them.

When it’s time to make their recommendations, students often stay up all night in the SELL—and not because they’re procrastinating. “They want the most current information to make their pitch, so they really push themselves hard,” says D’Souza. The students hold themselves to high standards.

In addition, students are invited to a meeting conducted by the Investment Committee of Loyola’s Board of Trustees as part of the course. “This is a big deal because it’s real,” says D’Souza. “You’re seeing a bunch of accomplished people interviewing a hedge fund manager who’s requesting to manage some of Loyola’s endowment.”

The students experience what it’s like for someone to be interviewed and learn which questions are asked.

Often, says D’Souza, committee members will turn to students and ask, “What do you think of this?” and “What would you do?”

“So it’s not a token experience. It’s a true one where you’re respected enough that they will ask for your opinion in a genuine way. That means a lot to the students,” says D’Souza.

How have the students done? Well, they started with $500, 000… and the SAP Fund is now at $650,000.

“They’re doing really well,” says D’Souza. “They’ve been able to do what’s called ‘beat the market’.”

“In none of my other classes do you see this sort of interaction with the community, the administration, the dean’s office, the students, and the professor,” says D’Souza. “It’s such a holistic class. For everyone involved, it makes for a fantastic experience.”