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DALLAS, Texas (SMU) - Investing for long-term growth, SMU Cox students outperformed some of the nation's most recognizable mutual fund portfolios including those offered by Federated, Fidelity, T. Rowe Price, and Vanguard. Based on a five-year history of the S&P 500 core managers, SMU Cox students discovered their investment strategies have paid off in the long run with the MBA portfolio placing 5th out of 509 managers and the combined portfolios of the MBA and BBA group placing 27th. The S&P itself came in at 167.

Students in the course are completely entrusted with the management of a $6 million portfolio, $3.5 million of which is managed by SMU Cox MBAs. "It was beneficial to me to see how it all comes together," remarked Jesse Van Luvan (MBA '02), chief financial officer for KMG Capital Management/Good Trading Company. "The course was the actual experience of managing money, the nuances of making sure you know the client's needs, and then building the portfolio around that."

For close to 30 years, Practicum in Portfolio Management has been offered at SMU Cox to give students real-world experience in money management. The course was the idea of former SMU Cox finance professor Don Jackson who recognized the benefit for Cox students in the classroom as well as the benefit for their future careers . Initiated with an endowment, SMU Cox first began offering Practicum in Portfolio Management at the undergraduate level. In 1994, the course was added to the MBA offerings.

Each semester, the select group of students begins the course by writing a code of professional conduct for the class. From there, they study the client's needs, examine risk tolerance, undertake an economic outlook to determine future strengths and weaknesses in the economy, derive an optimal asset allocation of investment across major asset classes, and among other steps, buy and sell individual securities to achieve specified investment goals. At the end of the semester, after they complete a comprehensive annual report, the students explain and justify their investment decisions to SMU's Investment Committee.

"We don't play the short term run-and-gun approach in the class," said Rex Thompson, finance professor at SMU Cox School of Business. "We prefer to emphasize fundamental analysis coupled with low turnover and a long view of market trends."

Not only did the SMU Cox portfolios perform well in the long term, but in a three-year history, the combined MBA and BBA portfolio placed 24th out of 823 managers. The portfolio histories were determined by performance assessment software offered by J.P. Morgan Chase. The software provides a performance assessment for each manager and then compares the performance to a universe of mutual fund managers who utilize the same style and report their performance to S&P.

SMU's Cox School of Business offers a full range of business education programs, from BBA and full-time MBA to Professional MBA (PMBA), Executive MBA (EMBA), and Executive Education. Cox is ranked among the top business schools nationally and internationally by major publications including BusinessWeek, Financial Times, Forbes, The Wall Street Journal, and U.S. News & World Report. In addition, the school's Business Leadership Center (BLC), Caruth Institute of Owner-Managed Business, American Airlines Global Leadership Program (GLP), and Associate Board executive mentoring program are recognized nationally and internationally.