The Power of Giving

Applied Portfolio Management Program

Michigan Tech’s Applied Portfolio Management Program (APMP) exemplifies the giving cycle, or the transformational impact of a gift from the donors to the benefactors.

When Professor Dean Johnson came to the School of Business and Economics at Michigan Tech in 1998, he had a vision for the APMP—a multidisciplinary course where student firms would receive real-world portfolio investment experience. Enter James (Jim) ’67 and Dolores (Dee) Trethewey, who have supported APMP from day one.

An alumnus of the business administration program, Mr. Trethewey valued giving back to Michigan Tech. “It’s very important to remember those things that contributed to your success as you go along this trail of life,” he said in an interview in September 2013, approximately one month before he passed away on Oct. 13. The Tretheweys established scholarship funds to support the APMP start-up, and later endowed the James and Dolores Trethewey professorship, to which Johnson was named in 2012.

The Tretheweys, as well as Gene Klippel, former dean of the School of Business and Economics, were instrumental in getting the APMP off the ground, according to Johnson: “The dean, dean’s advisory board, and the Tech Fund took a leap of faith to start the program and let students manage the funds. It really was a visionary program.”

Joe ’76 and Vickey Dancy carried on the tradition of alumni giving in 2011, providing APMP students with a modern trading room and industry-standard technology. The LSGI Trading Room boasts a $25,000 per year Bloomberg Machine (one of only two in the Upper Peninsula), which is used not only for trading but also for its job-matching feature.

These donors have invested in something that’s bound to pay out significant returns for years to come, regardless of the state of the economy or stock market: education. APMP’s ROI are both monetary and intangible. From its modest $20,000 beginnings, the APMP portfolio has grown to $1.3 million. Students manage scholarship accounts for the School of Business and Economics, furthering financial aid opportunities for future students. And then there’s the award-winning APMP director, Johnson.

“When I walk into the classroom, I have an hour to make a difference in the lives of those students,” said Johnson. “I try to find out where they’re from and what career goals they have. Once you develop a personal relationship, it becomes much easier to push them to learn because they realize I have their best interest at heart.”

Read on to learn more about the APMP and how the giving cycle continues.

What is the Applied Portfolio Management Program?

Students experience real money, real investments, real business—that’s the Applied Portfolio Management Program (APMP) at Michigan Tech.

APMP offers students from all majors the opportunity to participate in managing an investment portfolio worth $1.3 million. The program is a rigorous one-year course with both a lecture and a trading room component that emphasizes client-based work. Oversight is provided by the award-winning course instructor, Professor Dean Johnson, an advisory board of professionals, and the Michigan Tech Fund.

Students manage APMP endowments and scholarship funds for the School of Business and Economics. Gifts to the program are doubly impactful: students have the experience of managing the funds, which support APMP student scholarships and the course’s operations/working environment.

How does it work?

The Students Form Firms
APMP mimics the process of a real-world investment firm. Students are not only portfolio managers, but also entrepreneurs and security analysts—they have to decide how much to invest in bonds and stocks, determine exposure to interest rate or market risks, and assess individual securities. Six to ten students form an independent investment firm, and there are multiple student firms in every class, with each student having a unique role covering either a function of the firm’s front office (such as management or marketing) or back office (such as calculating performance and investment exposures).

The Firms Strategize and Pitch Their Products
Each student team develops an investment philosophy and strategy—or a plan for making and managing money—and pitches this “product” to their clients, the Michigan Tech fund and the APMP advisory board. The product needs to be sound, well planned, and consistent—sometimes the client requires a team to go back to the drawing board and come up with a revised plan. APMP students understand that they need to meet the client’s investment objectives and go through the invest object process, which identifies the client’s needs.

The Firms Make Informed Investment Decisions
Students involved with the program have access to Michigan Tech’s sophisticated Bloomberg Terminal (one of only two in Upper Michigan); the terminal is located in the LSGI Trading Room (made possible by Joe ’76 and Vickey Dancy), where students spend time analyzing real-time market data, researching price quotes, and placing trades. The teams meet with the advisory board three times—once to pitch their product, and twice for performance updates covering team decisions, transactions, and the portfolio’s status.

Why are APMP students amazing?

  • Three times in the past nine years, APMP has garnered first place in the University of Dayton’s Redefining Investment Strategy Education (RISE) portfolio management competition.
  • In recognition of their sweeps at RISE, APMP students and Dean Johnson, director of APMP, were invited to open the Nasdaq Stock Exchange, which was featured on national television and in Business Week.
  • The Michigan Tech team, comprised of APMP students, placed first in the 2013 Chartered Financial Analyst (CFA) Institute Research Challenge and advanced to the Americas Regional competition held in Toronto. Michigan Tech students were able to participate in the CFA competition thanks to a recent gift from Jim and Dee Trethewey.

What are the added benefits for students?

  • Each APMP student receives a scholarship to cover tuition.
  • Students have access to a Bloomberg Terminal in the sophisticated LSGI Trading Room.
  • Students attend conferences and compete in national competitions hosted by RISE and CFA, all expenses paid.
  • Prominent guest speakers, such as the president of the Minneapolis Federal Reserve, visit the class every year.
  • Students have access to alumni and advisory board members in high-visibility business positions.