What?

 

I participated in the MAVFund during my senior year at Minnesota State University, Mankato. The MAVFund is a student-managed investment fund through the College of Business, where students actively manage the university's foundation portfolio valued at over $860,000. As part of a team of 13 students, I took on the role of a sector analyst, covering the Consumer Defensive sectors out of the six other sectors. My responsibilities included financial modeling and valuation of companies, monitoring our current portfolio holdings, generating new investment ideas through research, and presenting stock pitches to the group. Throughout the semester, I spent 10 hours per week contributing to the fund's investment process and decisions during our weekly meetings. Other students also researched different sectors, evaluated stocks and economic indicators, and made investment recommendations to the Foundation Investment Committee. I felt excited and optimistic about the potential learning opportunities offered by the hands-on nature of the MAVFund course. My expectations going in were that it would develop practical skills applicable to a career in finance. As my starting point was having taken foundational finance courses like Business Finance and Investments, which are prerequisites for the MAVFund course, my background was theoretical knowledge but no previous hands-on experience investing money or making recommendations to investment committees.

 

So What?

 

The MAVFund allowed me to apply my finance knowledge and skills to real-world practice in equity analysis and portfolio management. We began by closely tracking major macroeconomic indicators, business publications, and economic forecasts to identify promising sectors, industries, and trends that warranted a deeper investment analysis.

 

The stages of the investment research process I followed for my stock recommendation in my sector included identifying promising companies based on economic conditions, reviewing research papers on those industry trends, formulating return forecasts and valuation models for those target companies by collecting financial data, ratio analysis, modeling, and other relative valuation methods were used for my investment recommendations.

 

Performing modeling and projection strengthened my technical skills, though gathering accurate consumer data was more challenging than expected. Ethical concerns in relation to accurately representing risks and limitations of our analysis and ensuring we have no conflicts of interest related to our personal holdings pushed me to refine my research approach. Rather than clinging to a single projection, I adapted my analysis based on changing real-world industry trends, especially for defensive sectors impacted by shifting consumer behaviors.

 

I also gained perspective on balancing portfolio risk-return through asset allocation and diversification decisions. Through debates over weighing riskier high-growth stocks vs stable defensive names, I better grasped appropriate weightings across sectors. I also understood the rationale behind investment caps, limiting exposure to any one stock or sector. This project contributes practical knowledge on evaluating real contemporary companies using the frameworks and tools that asset management firms employ and taught us that our recommendations can potentially inform investment policies and portfolio allocations.

 

As a group, we dove into the academic and market research focused specifically on underlying drivers and dynamics related to those industries. This provided crucial background context for formulating our hypotheses on companies we would likely benefit from. We had access to Morningstar financial databases and leveraged reference chaining to efficiently locate the most relevant and up-to-date materials. Staying organized with our sources and weekly research was important, and with key analysis, we developed relative valuation models for prospective companies.

 

The successes in locating information involved our access to professional tools like Bloomberg Terminals, Capital IQ, and equity research databases. Organizing the volumes of data into filtered investment models was challenging at times. Our main data analysis challenges stemmed from making accurate long-term forecasts. Constructing comprehensive financial statements required systematically gathering an immense amount of historical data, ratios, and averages.

 

Mastering Capital IQ and Bloomberg Terminals took practice but exponentially increased productivity. Still, making accurate long-term forecasts with so many assumptions was a challenge. The quick pace of changing market conditions also posed a hurdle to providing timely ideas and reports. Juggling multiple stock analyses reports simultaneously while absorbing economic news flows stretched my productivity. However, managing this workload prepared me for the diligence analysts undergo to steer investment outcomes. Seeing stocks I researched then perform well was deeply gratifying. And if I don't do my part every week and a drastic change within the market happens without my notice, it will not only affect my sector but our portfolio in general; this taught me ethical practices are crucial when investing significant capital.

 

After all the research and reports, we do class presentations. Presenting investment recommendations was nerve-racking at first since public speaking is uncomfortable for me. However, the experience greatly enhanced my ability to convey complex analyses and handle questions. Receiving detailed feedback after each presentation showed me areas to improve - from adding more visuals to how to lay out my PowerPoint. Throughout all my presentations, I grew far more composed and effective at persuading the team through data-driven arguments. Though communication skills require ongoing development, this was valuable learning. 

And the final presentation was by far the most enriching learning opportunity, despite the intimidating prospect of pitching our hard work to seasoned professionals from the CFA institute and the Foundation Board. Their constructive feedback taught me best practices for conveying complex analysis cohesively. Their questions also taught me the importance of intimately knowing our underlying assumptions and models to defend recommendations resolutely yet respectfully. For example, feedback on accounting more holistically for environmental impacts of supply chains led us to integrate sustainability metrics into our models. This strengthened our critical thinking abilities by considering additional success factors.

 

This level of diligence taught the rigor required to evaluate investment worthiness and potential upside for a stock. For example, constructive feedback on accounting more holistically for environmental impacts of supply chains led us to integrate sustainability metrics into our models. This strengthened our critical thinking abilities by considering additional success factors.

 

Now What?

 

The MAVFund mimics the actual pressures and rewards of guiding investment decisions in asset management roles. Moving forward, I'm even more driven to pursue a career as an investment analyst or portfolio manager after gaining hands-on experience through the MAVFund. I plan to highlight this unique background in job applications and interviews while I apply for internships. This experience has also given me insight into what it is like to do professional presentations, which I will utilize in my professional life. It will help me work on developing stronger public speaking and presentation abilities as these interpersonal skills are vital for investment roles but an area I need to improve. To continue building expertise in the field, I'm interested in obtaining the CFA charter after gaining work experience. With the hands-on lessons and knowledge from participating in the MAVFund, I feel well-prepared and confident to add value in professional asset management positions that I am passionate about in my career after graduation.