Some schools have their students play the stock market for fun. But students at the University of Dayton manage an actual portfolio of investments and have been doing so since 1999. They do it not just for the learning experience, but to benefit the University and area charities.
WYSO’s Mike Frazier spoke with Nate Jabaay, senior manager of the Davis Center for Portfolio Management, about the student-led fund.
The transcript below has been lightly edited for clarity.
Nate Jabaay: The Davis Center for Portfolio Management is the largest student-managed investment fund in the country, currently managing around $80 million of the University's endowment. So that leaves us looking at the equity markets, benchmarking ourselves with the S&P 500. We've outperformed the benchmark six out of the past seven years - looking to do so again this year. And it's been a great opportunity for the business school to get exposure to the world of financial services. We have an alumni network of 700 plus who have lined up at some of the most prestigious firms on Wall Street. And they've been really resourceful throughout these past 25 years and continuing to carry on this legacy as we embark on our journey from good to great.
Mike Frazier: Now, this is completely run by students?
Jabaay: Yes. So we do have a director whose name is Dan Kapusta. He is professor of finance here at the University of Dayton, along with being the director of the Davis Center. He has a little bit of oversight in terms of leading the Q&A session of the pitch, along with overseeing our many pitch processes in order to determine which names we're actually going to bring to the table to be pitched as a buy or sell recommendation. But he's never used his "veto power." So, it's something that we really respect from him and the fact that he's keeping it student managed and he does a lot of the backend work in terms of organizing our trips to New York, Chicago, Columbus, etc. So he's been a great supporter of the Davis Center and will continue to be so, not using that veto power, as we call it.
Frazier: So that's interesting. So if the students - I'm not implying that they would - but if the students are thinking about a risky investment, they do it at their own risk without any veto power from the faculty.
Jabaay: Yeah. So if there does need to be some sort of nudge in terms of a company that is on the riskier end of the spectrum and it's not something that the university or Professor Kapusta would be comfortable with investing in, then they would kind of relay that to us. But I think we do a good job staying within our parameters. We look at the Carbon 200 list, which is updated every couple of years, as well as being a Catholic university. We do follow Marianist traditions and are unable to invest in companies like Philip Morris or Smith & Wesson. So we do abide by those guidelines. And we follow our investment philosophy, which is growth at a reasonable price.
Frazier: And what are the funds used for?
Jabaay: The funds are directly a part of the nniversity's endowment, which is used for things like providing scholarships, using it for renovations of different buildings throughout the school. It’s a really neat way for us to kind of indirectly give back to the campus itself. We also manage a portion of the Dayton Foundation, which is a local nonprofit charitable organization. We donate 80% of the fee that we receive from them on behalf of the couple million dollars that we manage. And we actually donate that money to other local charitable organizations in the city of Dayton. So this past semester, we donated a portion of that fee to the family abuse shelter of Montgomery County. And we continue to do philanthropy throughout the city of Dayton as well.
Frazier: So I assume that the students who are a part of this program are in UD’s Business School.
Jabaay: I would say the majority of students are finance, economics or accounting majors. We do have some marketing people as well. And then in the past couple of years, we've seen an uptick in the number of engineers, computer science, and even pre-med majors interested in learning about investing.
Frazier: So it's not just for business students studying business. It could be any student at UD?
Jabaay: Yes, any student can apply. We're not looking for any specific majors. The majority of people, obviously, that would be interested are those kinds of finance and economics majors. But the Davis Center is open to all students throughout the university.
Frazier: Do students get academic credit for this?
Jabaay: No. It's all about passion. It's all about grit, hard work, and just really loving the process behind it and making great friends along the way.
Frazier: And if there's anyone listening who is attending UD, or will be, or parents of UD students or future UD students - if they want to become part of this, how would they go about doing that?
Jabaay: I think one of the best things to do is just visit the campus, come for a tour date of the business school. And if you're a rising senior in high school and looking to apply to the University, I definitely encourage you to maybe stop in the Davis Center and say hi to the people that are in there on your tour. The tour guide will kind of bring you in and then we'll give you a spiel of what we do. But I think it'd be great to kind of stick around for a few minutes, get a couple of people's names, and then if you end up applying to UD, our application process typically opens within the first couple of weeks that school starts.
