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Trading and Money Management in a Student-Managed Portfolio - 1st Edition - ISBN: 9780123747556, 9780080911939

Trading and Money Management in a Student-Managed Portfolio

1st Edition

Hardcover ISBN: 9780123747556
eBook ISBN: 9780080911939
Imprint: Academic Press
Published Date: 18th November 2013
Page Count: 504
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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

Maximize Information Ratio

Trading and Rebalancing

Practical Considerations

Chapter 5. Presentations

Internal Presentations

General Presentation Style and Delivery Guidelines

External Presentations

Chapter 6. Performance Evaluation

Performance Calculation

Performance Reporting

Performance Analysis

Performance Attribution

Performance Attribution Examples

Performance Attribution Commentary and Interpretation

Performance Attribution Complexities

Returns-Based Performance Analysis

Risk-Adjusted Return and Reward-to-Risk Measures

Transactions Cost Analysis

Chapter 7. Tools

Primary Data Sources

Other Information and Data Sources

Web Portals, Search Engines, and Business News

Brokers and Financial Service Providers

Index Providers

Licensed Services

Chapter 8. Forums, Symposiums, and Competitions

Texas Investment Portfolio Symposium (TIPS)

The CFA Institute Global Investment Research Challenge

R.I.S.E.: Redefining Investment Strategy Education

TVA Investment Challenge

The Cornell-Fidelity MBA Stock Pitch Competition

Chapter 9. The Present and Future of Student-Managed Portfolios

The Role of Security Trading Rooms in Business Schools

Student-Managed Investment Funds: An International Perspective




No. of pages:
© Academic Press 2014
18th November 2013
Academic Press
Hardcover ISBN:
eBook ISBN:


"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

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