The Seminar in Applied Portfolio Management was established in 1986, when the Provident Investment Counsel provided initial funding to afford USC MBA students the unique and valuable experience of participating in and learning about professional money management. By 1995, additional funds were raised by Greg Naiman and Britt Doyle (MBA ’90) from alumni and friends of the Marshall School of Business. In 2004, the Marshall Fixed Income Fund was established with a gift by First Pacific Advisors, LLC, as well as additional contributions from other donors. In 2011, the Global Equity Fund was established with a gift from Nancy and David Iben. In 2016 and 2017, the Provident Growth Fund received additional gifts from Larry and Karen Tashjian and other donors.

Larry and Karen Tashjian provided the seed funding to establish  the USC Marshall Center for Investment Studies (CIS), which hosts the SIF.   The SIF/CIS is guided by its Board of Advisors, including Sharon Kilmer, Suh-Pyng Ku, David Iben, Lisa Mazzocco, Michael Reilly, Jim Sarni, Sheldon Stone, and Larry Tashjian. As of May 2022, there are 513 SIF alumni in 36 classes. Today, 20 second-year MBA students are managing four equity and one fixed-income portfolios, each with unique investment discipline.

• To provide a group of 20 MBA students with hands-on experience in managing a portion of the University’s equity endowment;
• To provide an academic background for the appreciation of security analysis and portfolio management through assigned and self-selected readings;
• To enhance the academic experience through interaction with individuals and institutions engaged in the money management business;
• To produce and present an Annual Report which will provide description of the course experience and a record of achievement.

Since the funds managed are part of the University’s endowment, there is a long-term, principal-conserving aspect to their management. However, because the management of these funds is also intended to serve as a learning experience in a year-long seminar, there is also a shorter horizon in which the student managers are actively trying to beat their benchmark. This dichotomy is accepted and is part of the challenge of developing an appropriate performance attribution.

The primary constraint on this tax-exempt money is that it shall be fully invested in equities or fixed income securities with no more than 10% in cash. The average size of the individual holdings should not exceed 5% of the total portfolio, and the largest holding should not exceed 10%. For equity, the minimum market cap should exceed $100 million.

The Babcock California Fund is a domestic small-cap stock fund with at least 50% invested in companies domiciled in California. The Global Equity Fund is an all-cap global fund that invests in the developed and emerging capital markets. The Provident Growth Fund invests in domestic mid-cap growth stocks while the Trojan Equity Fund is a domestic large-cap value stock fund. Finally, the Marshall Fixed-Income Fund invests in at least 60% in domestic corporates, and the remaining in treasuries, MBS, high yield, agencies, preferred stocks and ETFs. Based on the investment guidelines recommended by the CIS Board of Advisors, each group of fund managers develops their own strategy for selecting securities, constructing their portfolio, monitoring their portfolio’s risk and reward, and evaluating their portfolio’s performance.

This comprehensive report details the SIF students’ activities and financial performance throughout the past academic year. Click here to read the SIF 2022 Annual Report.

The Capital Markets Training Room is located on the second floor of Bridge Hall and has all the elements of a state-of-the-art trading room with information screens, monitors, extensive software packages and research capabilities in real-time.  These teaching/research tools and resources aide students in managing their funds.  In addition to Barra (Portfolio Optimization and Performance Attribution), Capital IQ, Morningstar, Sentieo and Marketsmith, we also have three Bloomberg terminals. With Scott Johnston’s (MBA ’69) assistance, we have received a generous gift from William O’Neil of its (WONDA) Database for the students.