This college is giving students millions in 'live ammunition' to invest

Southern Methodist University (SMU) in Texas is teaching students how to invest by giving them more than $10 million in real money to buy stocks.

FOX Business’ Lauren Simonetti recently visited SMU and sat in on students while they pitched recommendations to their classmates. In addition, students practice thousands of mock interviews with alumni in order to prepare for their life after graduation.

“They’re working with live ammunition -- these are real dollars,” one professor said of the students in the program. Initial funding for investment is generally provided by key donors who want students to gain real experience, he explained.

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Kicking off in 1972, SMU’s is one of the oldest investment programs in the country. Currently, 35 undergraduates manage roughly $4 million in funds, while about $6.5 million is managed by 30 graduate students.

“This whole class is about teaching students to present, to research, and to write,” said another professor.

Southern Methodist University in Dallas  (iStock)

Profits made on SMU student investments are used to fund one of the university’s endowed chairs.

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SMU is not the only university with student-managed funds. Villanova University, for example, has seven such funds offering students real-world investment experience. Beginning in 2004, Villanova funds have grown from $100,000 to more than $1 million in total value.

Fordham University, which also has a $1 million fund, suggests that funds at most universities tend to “hover between $150,000 and $200,000.”

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