Second-year MBA students have the opportunity to manage the Marriott School’s $1.4 million stock portfolio—and although it’s called the Silver Fund, it mostly sees green.
More than twenty years ago, the Silver family established the Madelyn and Ruth Silver endowment at the school. The $200,000 gift was earmarked to be money managed by finance students earning their MBAs. Since then, it has grown to be worth more than $1.4 million.
At the end of their first year, MBA students apply to work for the fund for the following year. The twelve chosen are in charge of economic forecasts, security selection, and portfolio strategy. “Over the years it has become a big deal for students and recruiters,” says Steve Thorley, faculty advisor to the fund managers. “Being a Silver Fund student is a badge of honor for those going into an investment management career.”
Just ask Jon Fischer, a 2004 MBA graduate and Silver Fund participant. “That experience made a difference in my ability to be successfully placed after graduation,” he recalls. “It regularly came up in job interviews, and potential employers were always impressed.”
Despite a struggling stock market, the students in charge of the portfolio have beat the market and had a higher than average market return for the past four years. “That’s an impressive track record. If they were doing this as professionals it would attract a lot of customers and money under management,” Thorley says.
Students who work with the fund meet twice a week and make presentations on stocks they want to purchase. Thorley monitors the students and invites professional investment managers—often former Silver Fund students—to observe and address the students.
“This is an MBA project with real world consequences. Students learn how to work together under pressure and how to convince people without being overbearing,” Thorley says. “They also learn about the risks of investing and how to beat the market. Students are devastated if a stock they lobbied for doesn’t do well.”
The Silver Fund gives participants an advantage as they venture into the business world. “Making decisions with real money during my time on the Silver Fund prepared me for my career by teaching me the rewards of carefully researched financial decisions—and the consequences of not doing my homework,” says Fischer, a financial analyst for Payless ShoeSource, Inc. “The Silver Fund was a golden opportunity. I feel much more comfortable working in the real world than I would have without that experience.”
Silver Fund Performance
Academic Year (six months from 30 September to 31 March)
1) The Benchmark return for first three academic years shown above was 80% large-cap equity (S&P500) and 20% cash (3-month t-bill). The benchmark for 2003-2004 was 95% large-cap equity and 5% cash. The benchmark for 2004-2005 is 90% large-cap equity, 10% small-cap equity (Russell 2000), and no cash.
2) Performance is only for the first half of the 2004-2005 academic year (Q4 2004).
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For information about the Silver Fund or other mentored-learning programs, call 801-422-7696.
