Trading and Money Management in a Student-Managed Portfolio is a hands-on textbook for student-managed investment funds (SMIFs). The book presents the applied material that textbooks on portfolios and investments always overlook. Its focus on "how-to" questions summarizes the disciplines and skills necessary for trading. Covering equities, hedge funds and derivatives, and fixed income, it captures the breadth and detail necessary for developing and executing trading strategies.

Developed specifically for SMIF courses, the book features calculations, examples, and software that help you move from talking about markets to taking positions in them.

Key Features

  • Methodically summarizes the disciplines and skills necessary for trading
  • Teaches you to build a ranking model for securities and write a research report for a sell-side firm
  • Covers equities, fixed income, derivatives, and hedge funds


Primary audience: undergraduates and graduate (MBA) students taking classes associated with student managed investment funds. Secondary audience: MBA students studying asset management and portfolio management.

Table of Contents



About the Authors

Chapter 1. Investment Philosophy and Process

The Student-Managed Investment Fund as an Investment Management Firm

Investment Philosophy and Process

Investment Philosophy

Examples of Investment Philosophy

Investment Process

Examples of Investment Process

Internal and External Uses of the Investment Philosophy and Process

Appendix A: Common Investment Strategy Classifications

Appendix B The Role of Investment Philosophy in Evaluating Investment Managers: A Consultant’s Perspective on Distinguishing Alpha from Noise


Chapter 2. Organization

Organizational Structure


Roles and Responsibilities

Student-Managed Investment Fund as a For-Credit Course or a Volunteer Student Organization

Challenges to a Student-Managed Investment Fund

Fund Structure

Appendix: Operating Guidelines for Philip M. Dorr and Alumni Endowed Investment Fund

Chapter 3. Security Selection

Quantitative Analysis

Security Analysis

Company Analysis

A Good Company Versus a Good Investment


Dividend Discount Model

Discounted Cash Flow Model

Free Cash Flow to Equity Model

Valuation Using Earnings

Market Valuation Measures

Security Analysis Application

Example: Texas Christian University’s Educational Investment Fund

Appendix: Cutting through the Hype

Resources and Bibliography

Chapter 4. Portfolio Construction

Portfolio Weights and Returns

Expected Returns

Total Risk of a Portfolio

Tracking Error and Relative Risk

Tracking Error and Relative Risk Using Active Weights

Portfolio Optimization

Minimize Total Risk

Minimize Tracking Error

Maximize Sharpe Ratio


No. of pages:
© 2014
Academic Press
Print ISBN:
Electronic ISBN:

About the authors

Brian Bruce

Affiliations and Expertise

Finance professor at Baylor University, Editor-in-Chief of the Journal of Trading, and Editor-in-Chief of the Journal of Investng

Jason Greene

Jason Greene is Professor of Finance at Southern Illinois University and faculty advisor for the Saluki Student Investment Fun (SSIU), which provides SIU students with hands-on experience in portfolio management and investment research.

Affiliations and Expertise

Department of Finance, College of Business Southern Illinois University


"This textbook for advanced undergraduate and graduate students who participate in a student-managed portfolio is designed to fill the gap between traditional academic textbooks on investments and portfolio management, and practice-oriented books on specific investment strategies.", March 2014
"The Bruce and Greene text provides a comprehensive toolkit for the practical management of a student managed investment fund, including many detailed examples taken from real world funds. It thoroughly covers all of the major topics in leading investments texts, but supplements theory with realistic practical application."--Gary C. Sanger, Louisiana State University