Loras College Keane Hall

Loras Finance Students Investments Outperforming S&P 500 Index

Robert Waterbury

Finance majors at Loras College manage a portion of investing for the college’s endowment through the Loras Investment Fund for the Endowment (LIFE) Portfolio program. The LIFE Portfolio program started in 1998 with an initial gift earmarked for students to use for investments. Since the fund’s origination, those investments have performed well and have stayed very close to the S&P 500 performance with a total return of 305.27% compared to 305.61% for S&P. And over the past three years, the Loras portfolio has outperformed the S&P, with total returns of 60.65% over that period compared to 37.65% for the S&P 500. Current Assets Under Management exceeds $350,000..

“The LIFE portfolio courses and Dr. Eric Eller’s approach to student engagement is the epitome of how we deliver an outstanding business education to our students – real-world, applicable experience,” Jim Padilla, J.D., dean of the Francis J. Noonan School of Business, said. “This, combined with the final presentations the students give in front of the Life Portfolio Advisory Board, is an incredible educational experience. The Board’s support and involvement at that final stage are crucial to student learning, validation of that learning, and we are extremely appreciative of the Board’s involvement.”

Over the past three years, the Loras portfolio has consistently performed ahead of the S&P, showing an increase of 60.65% over that period compared to 37.65% for S&P.

Portfolio decisions are based on a combination of a company’s financial success and its ethical standards. LIFE students gain real-world experience in managing actual money and applying valuation techniques they learn in their other finance courses.

“Since these are Loras endowment funds, Loras is our client and students learn about aligning client values with investment choices. Any investment in the fun must regularly pass a Loras Values Screen that is based in principles of Catholic Social Teaching,” Eric Eller, Ph.D., associate professor of finance, said. “We want select companies to follow a positive, ethical approach to maximize value for all of their stakeholders while also upholding the idea of human dignity and care for God’s creation.”

The course uses a fundamental value approach in its analysis, evaluating all aspects of a company and its future prospects to look for companies currently selling at a lower price than students think they are worth. Techniques include Dividend Discount Modeling, Discounted Free Cash Flow Modeling, and Residual Income Valuation.

In addition to the ability to contribute to the College’s endowment, the LIFE Portfolio supports student academic travel for all Duhawks. Last year $9200 was drawn from the fund and made available to support student travel to present at academic conferences or participate in academic competitions, demonstrating how much Loras finance students believe in “Duhawks supporting Duhawks.”

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