Sir George Russell CBE Makes Donation to the DUBS Student Investment Club
3 November 2014
Following the popularity of the stock trade exercise that has been running on the MSc Finance programme for many years, the School established a genuine investment club with the help of a £5,000 donation from alumnus Sir George Russell CBE (BA Economics 1955/58). Here, the current Student Chair, Adrees Nazir (MSc Economics & Finance 2013/14) explains how the club has evolved and how the alumni network might be well placed to take them to the next level.
What is the Investment Club?
The MSc Investment Club provides a platform for students to bridge the gap between the theoretical foundations of finance and the practical aspect of it. The club consists of nine students from the 2013/2014 MSc Finance cohort, and it gives students an opportunity to apply portfolio theory taught within the course and manage an active Investment Fund. It enables students to get a hands on feel as to how Portfolio Management works, requiring students to thoroughly analyse stocks, calculate the risk appetite of the Fund and successfully execute trades at the appropriate time.
Each year the members of the club are selected by the Programme Director Dr Thomas Renstrom via an application process at the beginning of the academic year allowing the Club to start investing immediately. The Club has a nominated Chair who is required to deal with the smooth operation of the club and is the main point of contact with other departments within the Business School and University. The fund is then passed onto the new group of members each autumn.
What are the main activities of the Club?
The members of the Investment Club usually meet on a monthly basis to discuss the position of the fund and any other possible investments that the members see as viable to make. In order to mitigate risk the Business School have only allowed for investments to be made in the FTSE 100, and no complex derivatives or leverage positions are permitted to be taken. The Club and its members also act in line with the code of ethics the Durham University upholds ensuring there are no conflict of interests.
In carrying out the investments, the members are each allocated a sector of the FTSE 100 to research. Each member is then given responsibility to look at the available firms within the sector, and if it is seen to be feasible, the members produce a stock report and pitch their stock to the rest of the club. Once the pitch has been presented, the members discuss the possibility of carrying out the investment based on the fundamental analysis provided. Thereafter a vote is conducted by the Chair to determine the outcome on whether to invest or not.
Building the legacy for future members
Although the year has been successful in many ways, the members feel that the MSc Investment Club could be used in a powerful way to further enhance the reputation of the Business School and the MSc programme. The ethos of the Club is not only to allow its members to gain a practical insight into portfolio management but to also benefit our peers, in order to maximise their experience of studying at Durham.
The end of year investment report will give a detailed analysis of the portfolio and the reasons as to why the investments were carried out. It will give a breakdown of each holding, along with a prediction by the analyst giving a suggestion where the stock is heading. The report also intends to include short articles from academics and industry professionals which will allow for the investment club to be seen as a prominent establishment within the Business school. This report will also help inform the next cohort of students who will take our baton in 2014/15.
Seeking alumni support
Another key aspect of progression which the Chair is passionate about is bringing in sponsorship from the key firms within the financial industry. This will allow the Investment club to benefit the wider cohort of students not only the postgraduates but also the undergraduates as well. Through forming relations with firms within the industry, the Investment Club will be able to deliver networking events, educational talks and in essence provide a network in which like- minded students can work together and help each other.
If you are interesting in supporting the Investment Club in any way including sponsorship opportunities please contact Anne Allen at anne.allen2@durham.ac.uk.