Members of an investment club at Yale University have helped create a $500,000 student-run fund to bring more real-world experience to the business school.
The fund, established by the School of Management, will be run by students enrolled this spring in the School of Management's course on security analysis, also known as value investing _ a strategy in which investors buy undervalued stocks and profit when the market corrects.
Leaders of Yale's Investment Management Club worked with faculty and the management school's International Center of Finance to create the fund and expand the security analysis course from one semester to two.
"This is an exciting opportunity for the students to acquire the tools to become star buy-side finance professionals," said finance professor Matthew Spiegel, who teaches the value investing course with accounting, economics and finance professor Shyam Sunder. "Students will acquire tools that should help them throughout their careers."
Students act as analysts in the first semester of the course. They will now have an opportunity to enroll for a second semester to act as portfolio managers of the new fund.
"It is their job to determine the risk and returns of the stocks under their purview and explain their findings," Spiegel said. "They will also help manage groups of first-semester students _ their analysts."
Some of the fund's returns will be donated to student scholarships or the school's Internship Fund. The rest will be reinvested.
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