Portfolio management practicum courses bring the real world to the classroom
By Justin Walker
There is no better way to learn than by doing. For the students in the portfolio management practicum courses within the Hankamer School of Business, there is a lot of doing.
Housed within the Department of Finance, Insurance & Real Estate (FIRE), the hands-on, high-impact courses equip students with the knowledge and resources they would need to research, analyze and manage an institutional investment portfolio. Brandon Troegle, a part-time lecturer for the department and managing director and portfolio manager with Hillcrest Asset Management, serves as one of the professors for the course.
“There was a lot of forethought into what students needed to know when the first course was launched in 2001,” Troegle said. “There were not many student-managed portfolios across the country. When it was introduced at Baylor, the School was forward-thinking and it became an integral component of the business school that helped set it apart.”
The Large Cap Portfolio Management Practicum was created with about $400,000 in capital. The one-semester course was designed to reflect the operation of an investment management firm, Troegle said. Student teams prepare detailed reports on companies with large-cap stocks, such as Apple and Microsoft. The presentations feature a detailed report on the stocks which leads to a class discussion on whether or not to invest in the company.
Over the years, the fund—The Philip M. Dorr Alumni and Friends Endowed Investment Fund—has grown to more than $9 million. This was done through generous contributions from alumni and friends, including Dorr, as well as university endowments and appreciation from successful investments made by the fund. It is a big responsibility for these students to handle these decisions, Troegle said.
“It is not an easy course,” he said. “There is a lot of research that goes into the analysis. It’s a lot of work to get your arms around a company for the first time. Then they have to communicate those insights to a room full of peers, and the professors who are investment professionals. These presentations are in depth—sometimes an hour and a half—and then fellow analysts in the class get a chance to ask questions and debate the merits of the investment with them.”
The experience in the class is designed to mirror the real world, which is why the class has always been taught by industry professionals. Students are conducting a level of security research and valuation analysis similar to working in the industry, so that they are prepared to embark on investment careers when they leave Baylor.
The Small Cap Portfolio Management Practicum is structured in a similar style to the large-cap course, with a few significant differences. The first is in the name—instead of researching large companies, many found in the S&P 500 stocks, students in this course research smaller companies with a market capitalization of under $4 billion, Troegle said.
“These are much smaller companies, some of which the students have not heard of before,” he said. “It is a fun class because it is really focused on just doing in-depth research on companies that have less publicly-available information than the large-cap stocks less coverage by investment professionals.”
The length of the course is another major difference. The small-cap practicum is a two-semester course with an emphasis on out-of-class assignments and in-class discussion. The fall course, FIN 4285, is a two-hour course, followed by the one-hour FIN 4186 course in the spring.
Another element unique to the small-cap practicum is the intercollegiate challenges in which a team competes. Each year, a student team from the course represents Baylor at the Southwest Region’s Chartered Financial Analyst (CFA) Investment Research Challenge. The team presents a written analysis and report on a pre-selected company and, if chosen for the top ten finalists, gives a ten-minute oral presentation in front of industry professionals.
Baylor finished in first place in 2019 and advanced to the national competition in New York City. The success is very meaningful to the practicum and the Hankamer School of Business, Troegle said. It showcases the students’ knowledge of the content they are learning in these courses and can apply the principles outside of the classroom to great success. That understanding has led many alumni of the practicums to big places, such as JPMorgan Chase & Co. and The Goldman Sachs Group Inc.
The success of the practicums comes with an added bonus for students as well. Money generated through the investments has been distributed as student stcholarships. Since 2005, more than $2 million in scholarships have been distributed with proceeds from the fund.
The relevancy of these courses is not lost on Troegle. He sees the value in what the students are doing and believes in its unique approach.
“These classes are very different because they bring the real world into the classroom,” he said. “This is not a course where the answers are in a textbook and there is an objective answer. This is the real world.”
For information on the application process to either the Large- or Small-Cap Practicum, go to www.baylor.edu/business/financialmarkets/.