Treasury Management Association of Chicago (TMAC) Student Managed Portfolio

Course Specifications

• Student Managed Portfolio is a competitive-entry class that has up to 12 student analysts each semester.
• Students act as fiduciaries and build a portfolio of equity investments using real money.
• Analysts meet weekly to discuss current events, portfolio performance and risk, macroeconomic indicators, industry analysis, and company benchmarking data. Stock buy/sell recommendations are made after the consideration of these factors, as well as relative valuation techniques, discounted cash flow, technical analysis and ESG concerns.

Requirements

• No prior investing experience is required.
• Must successfully complete FINA 330, 340 and 350 the semester prior to enrollment in this course.
• Fill out an application form with an attached essay by the due date.
• Must be in academic good standing.

This course may be repeated twice by enrolling in FINA 445 and then FINA 446.

Contributors to Portfolio

• Treasury Management Association of Chicago (TMAC) generously provided $20,000 to initiate the fund and program in 2000.
• That same year, the NIU Foundation additionally shifted $200,000 in funds to the analysts’ oversight.

Investment Policy

The fund invests in U.S. companies and American Depositary Receipts (ADRs) with market capitalizations of $1 billion or more. The fund is 100 percent equity and is value style. Current holdings are closely monitored and ratios are compared to the industry averages on a weekly basis. At any given time, the fund has between 30-40 holdings.

Investment Procedures

• As a student analyst, you will follow a top-down approach, starting with an economic forecast.
• You will then perform an industry analysis and company analysis.
• Each company is thoroughly analyzed by comparing the following ratios to industry averages: price/earnings, price to sales, price to book, price to cash flow, price earnings growth, net profit margin, EPS growth, return on assets and return on equity. Emphasis is placed on low P/E, low P/B and high dividend yields.
• As value investors, you will look for mispricing in the market with the anticipation of a market correction.
• You will research current company news, earnings reports, analyst ratings and the price of the stock relative to its 52-week high.
• Finally, you will vote on whether or not to purchase the stock.

As a student analyst, you will improve your research skills by utilizing Bloomberg Professional and Wharton Research Data Services (WRDS) along with publicly available data from sources such as Yahoo Finance for valuation purposes.

Written Investment Policy