For the first time since its inception in 2001, the WSU Cougar Investment Fund (CIF) has exceeded $3 million.
Carson College of Business students in Finance Professor Mario Reyes’ Cougar Investment Fund course make investment recommendations for the fund with the objective of outperforming the Standard & Poors (S&P 500), an American stock market index based on the market capitalizations of 500 large companies having common stock listed on the New York Stock Exchange or NASDAQ.
Established by former Carson College Professor Rick Sias, the CIF portfolio was originally funded with $1 million, and no money has been added or withdrawn from the fund since.
“Due to recent market increases and investment decisions by the CIF students, the fund currently is over the $3 million mark,” says Karen Kellerman, WSU senior investment fund manager. “This will allow finance students a wider margin of investment opportunities and hands-on experience as portfolio managers.”
Investment strategies lead to success
A number of strategies led to students’ success—among the most significant was the appointment of two designated CIF portfolio managers, Derek Faber, a finance major from Edgewood, and Ian David, a finance major from Vancouver, who guided the class on investment decisions on a range of S&P 500 sectors.
As portfolio managers, Faber and David provided strategic guidelines to teams of students tasked with making an investment decision, developing a stock report presentation, and pitching it to the class.
When researching and analyzing stocks, the managers take an in-depth look at companies’ financial statements and use methods like discounted cash flow to value the attractiveness of a company.
“The most productive investments were in the technology sector, which rose as a whole around 33 percent this past year. Apple, one of the prominent investments in this sector, performed well this semester,” says David. “Outside of the technology sector, our investments in Boeing and Home Depot did very well, beating their respective benchmarks.”
The whole class discussed each pitch and voted on whether to invest. Faber and David had authority to determine the amount of the investment, or veto it. Decisions were based on staying within 5 percent of the S&P 500 sector benchmarks, and students only invested in stocks with a $1 billion market cap.
Cougar Investment Fund ROI
“Making investment decisions for the portfolio in class provided excellent real-world experience,” says David. “One of the great strengths of the class is the open discussions that take place daily, often leading to new investment ideas being generated. Being a leader in the class and guiding the decision making of our investments has helped me further develop my financial analysis and analytical skills. I plan to use these skills throughout my career in the finance industry.”
“I plan to be involved in the investment field after graduation, and being a portfolio manager was one of my favorite experiences as a Cougar,” says Faber. “In my first day as a student walking into Todd Hall years ago, I saw students working on the portfolio and knew one day I wanted to be a part of that.”
Learn more about the Cougar Investment Fund