Students manage $1 million fund

By: Meredith Whelchel – Managing Editor

A team of University of Dayton students have been managing $100,000 since early March, and have accumulated nearly $1 million for the Kudla Dynamic Allocation Fund.

David Kudla, who resides in Michigan as the CEO and Chief Investment Strategist of Mainstay Capital Management LLC, said he wanted students to “spread their wings” and manage the fund as professionals would.

“When students begin applying for full-time jobs, real experience is going to put them ahead of their competition. It will make all the difference,” Kudla said.

Kudla is also the executive director of the R.I.S.E. forum and an adjunct professor. Mainstay Capital is a full service wealth manager, according to its website.

The fund’s vision is to become the nation’s premier student-managed account, according to its policies, procedures and operations handbook. The team is broken up into three segments with three analysts each, including United States equity, international equity and fixed income, according to the handbook.

Along with the students, five advisory board members from financial institutions like BlackRock and J.P. Morgan Asset
Management are available to offer advice on investments.

Nate Hauge, a senior finance and economics major and chief investment officer, said the team members work with exchange-traded funds (ETF), mutual funds, stocks and bonds. He said ETFs track the performance of an index, like the technology sector.

This fall, Kudla said he felt the students had performed well and were ready to handle an additional $900,000.
Hauge said the team was confident in its ability to handle this amount and that Kudla trusted the students’ ability to make good decisions.

“When David told us he was going to increase the fund’s amount, we knew the pressure was there regardless,” he said.

To continue growing the fund, Hauge said the team has to approve any investment pitch with a two-thirds vote before a new investment decision is made. The team also meets formally on a weekly basis, but members work independently throughout the week, he said.

“I have veto power for all investment pitches, but I don’t think I’ll ever use it,” Kudla said. “It’s important they make all the decisions if this truly is a student-run portfolio.”

Paul Bobrowski, dean of the UD School of Business Administration and advisory board member, said if an investment has a negative outcome, the students would not be held liable.

“My main goal is to ensure all students are protected so we worked with legal and David signed a hold-harmless agreement,” Bobrowski said. “Ultimately this is a great opportunity for experiential learning.”

Hauge said they are looking to add new members before the end of the semester. Positions are open for students of any year.

Jake Recker, a senior finance major and team analyst, said current members will serve as mentors for those added to the team at the end of this semester. He said in the future, there will likely be a more formal training program.

“Our goal going into the new year is to outperform our benchmark,” Kudla said. “Bringing new members to the team, like engineers or science majors, could provide valuable insight to help the fund achieve its goal.”

Although the team formed slowly, Hauge said they are committed to transparency with the administration and other university members.

“Next semester two students will be participating in an independent study to focus our time on the account under the advisement of David,” Hauge said. “Once more students get experience, hopefully there will be a class in place to get more people involved.”