Faculty Advisor

Lynda Livingston

Area of Study

Arts, Humanities and Social Sciences

Publication Date

Summer 2021


Many business schools offer finance students the opportunity to run student-managed funds, which are meant to give participants experience running real money in real time. The usefulness of such an experience, however, depends on the structure of the fund: does it encourage stock picking or portfolio management; is it grounded in economic principles; does it mitigate or exacerbate behavioral investment biases; does it promote true active management, or encourage benchmark-mimicking closet indexing? In this paper, we present a description of our university’s fund, highlighting critical industry measures of active management to assess its performance. We also describe interviews and a survey designed to assess both the incentives and educational outcomes for the student managers. Some of our main generalizable findings are that funds’ benchmarks must be consistent with the actual investment approach employed, that performance metrics must be clearly and explicitly determined in advance, and that the fund’s investment policy statement must be reflective of empirical market realities.

Agricola Scholar


University of Puget Sound