If you'd like to learn more about the Archway Investment Fund's year, their Annual Report for 2021 can be found here.
2021 was a time of turmoil for investment firms around the world as portfolio managers continued to deal with unique economic and financial market developments on a scale rarely seen before. The continuing COVID-19 pandemic, and its impact on companies, their stocks, and the economy, presented challenges that had a significant impact on investment portfolios and a recovering economy.
For the student portfolio managers of Bryant University’s Archway Investment Fund (AIF), it was an ideal environment to immerse themselves in their field and gain invaluable experience. “One of the reasons I joined Archway is that I knew it would get me out of my comfort zone on a daily basis,” says William Swart ’22, an Archway Investment Fund Equity portfolio manager and member of the fund’s Macroeconomic Committee during the fall 2021 semester. “That’s where you grow the most and that's why I came to Bryant.”
Throughout a difficult year, the Archway fund persevered, weathering the financial storm and ensuring that the student managers would be able to face whatever the future holds. “There were so many considerations we had when we were managing the fund: inflation, interest rates, political turmoil, global supply chain issues…” remembers Swart’s fellow portfolio manager Abbey Allen ’22, who also served as a member of the fund’s Executive Committee. “We had it all during our semester,” she notes.
A signature learning experience
The AIF was established in 2005 to provide Bryant students with the opportunity to manage an investment portfolio by combining the investment principles taught in the Finance Department curriculum with the skills and processes employed by practicing investment professionals. Initially launched as a long-only, U.S. equity fund with $200,000 in September 2005, it has now become a multi-asset program with separate equity and fixed income portfolios with a combined value of $2,867,300 as of December 31, 2021.
Through the two course Archway sequence, students first act as security analysts by studying companies, building valuation models, and making stock recommendations. The also learn concepts such as sector allocation, portfolio construction, performance attribution, and professional ethics —and how to apply these concepts to the portfolio. Familiarizing themselves with industry-standard investment software from Bloomberg, FactSet, MSCI, and Sustainalytics gives them the tools to understand market developments and analyze and manage investments.
"We tell them you are managing this sector and you have $400,000 to manage. This is your money, this is your decision, this is your investment.”
Then the Archway program takes those ideas to a new level. In the second course, the student analysts become the fund’s portfolio managers, with full investment authority. “The Archway professors guide the portfolio managers and act as risk managers, but this is 100 percent a student-managed fund,” explains Finance Department Chair Asli Ascioglu, Coordinator for Bryant’s Financial Markets Center and the Archway Investment Fund. “We give them full responsibility and that makes a big difference for them. We tell them you are managing this sector and you have $400,000 to manage. This is your money, this is your decision, this is your investment.”
Being a part of the Archway program serves a challenging and rewarding capstone for the students’ studies in Finance, one that requires them to put everything they’ve learned into practice. “It's one thing for learning to be theoretical, to raise your hand in class to answer a question, but it’s another thing entirely to hand me an order form for a $25,000 trade,” notes Executive in Residence and Lecturer Kevin Maloney, who taught the Archway Fixed Income Portfolio Management course and co-taught the Archway Equity Portfolio Management course in the spring and fall semesters.
“It's not a game anymore when you start as a portfolio manager; you realize that extent of what you're doing,” states Swart. “You realize this actually matters and that the university is like entrusting this money to you. You are a fiduciary to the University, and you are responsible for that.”
A whole new world
By immersing themselves in real-word application, Archway students develop a new respect for their field. “You become a lot more connected to your work,” notes Allen. “Before Archway, sometimes I’d think of finance as just my major, without really seeing past that. I’d think of my classes as just courses, as ‘Finance 312’ or 'Finance 315,' for instance. And then I joined Archway and realized ‘This is really investing, and we really are managing a real portfolio.’ It helps you connect what you’re learning to real life.”
Performing actual trades also adds a new dimension to their studies. “You always have the portfolio in the back of your mind during class and are working out how to put the things being taught into practice,” Swart notes. “It makes learning easier and more effective.”
“The Archway professors are our biggest supporters, but they’re also our biggest critics... That’s the best kind of professor you can have.”
The Archway program professors draw from decades of experience in the financial management field to prepare students for the host of investment factors and situations they’ll encounter. “The Archway faculty work really well together as a team because they all have expertise in different areas, from risk management to Environmental, Social and Governance issues,” says Swart. “They also do an incredible job of bringing the real world into the classroom and making sure the concepts we’re learning apply to what you’re doing.”
The investment fundamentals their professors instill in them allows the Archway portfolio managers to make clear-headed decisions and see their way to the heart of matters. “When you do a deep dive into a sector or a company, you might think that you know what's going on, but you don't really understand it until you really examine it as a whole: the companies, the industry, and the global factors involved,” Allen reflects.
Learning about risk and learning to manage risk
The Archway students’ educations were put to the ultimate test this past year as they navigated a volatile financial market and made difficult choices in a constantly changing landscape. “Finance relies on numbers, but it is also an art,” says Ascioglu. “We have financial statements, and we do evaluations but the Archway students have to be able to look at the numbers and understand what is behind them and the stories they tell. You can only develop that ability by actually doing it.”
As the world shifted around them, the portfolio managers learned to keep their balance and make shrewd, informed investments. “Learning to control your emotions in investing is an important acquired skill, and it requires you to fall back on the fundamental processes, principles and approaches you’ve learned,” says Maloney. “It’s absolutely vital to be constantly thinking and re-evaluating. One of our goals is to have our students constantly asking questions about the things that are in the portfolio.”
“We talked a lot about risk. How to define it, how to attribute it, how to calculate it, and how much was appropriate. Things like ‘What is your risk tolerance? How far are you willing to go?’”
“The Archway professors are our biggest supporters, but they’re also our biggest critics,” agrees Allen. “During a stock pitch, they're always going to be the ones with the really hard questions. But they’re also always there for clarification or support. That’s the best kind of professor you can have.”
The students also honed their problem solving and analytical skills by weighing how global issues intersect with human nature. “One of the most important things we learned is to always be forward looking,” Swart notes, pointing to how fluctuating energy concerns drive consumer and industry behavior. “It’s not enough to understand what people are thinking now, you have to consider how they’ll think in the future. You’re trying to understand, and get in on, a trend as it develops—or even before it develops sometimes.”
But just as important, he says, is being able to keep a cool head while others are losing theirs. “We talked a lot about risk,” remembers Swart. “How to define it, how to attribute it, how to calculate it, and how much was appropriate. Things like ‘What is your risk tolerance? How far are you willing to go?’”
Confidence and teamwork
Ultimately, one of the largest benefits of the Archway experience is that it teaches students they have the skills to succeed if they trust themselves and their work. “The story of our entire time in Archway has been the word ‘conviction,’” says Allen. “Our professors told us, “We want you to believe in your trades. If you really believe in yourself and you believe in your valuation, you can take a stand on it.”
“You look around and see the people in your Archway classes and they’re all so talented. You ask yourself, ‘Do I fit in here?’ But then you realize you're there for a reason,” she states. “And then you go to work.”
“When they ask you, what do you know about investing? You can say ‘This is what we’ve actually done. This is what we bought and sold, and this is why we did it.’
They also learn that they can rely on one another. “You have to have a good team. Everyone relies on one another,” says Swart. “Whenever we had a big decision to make, I knew that I could always reach out to my team, and we could make a game plan and get to work. When everyone on your team has done their research and comes together with their own convictions about the company, that’s when the best valuation work is done.”
Their trial by fire managing the AIF, Swart and Allen say, was something they won’t forget and a perfect learning experience. “It's never going to be ‘just a normal day on Wall Street,’” states Swart. “There's always going to be something going on. We were managing the portfolio in the middle of events that no one has ever seen before and will be affecting the markets for years to come. It's been an extremely valuable experience to learn how to circumnavigate that.”
“This is our time to learn, to make mistakes,” adds Allen. “We're not 10 years into our career, we're literally still students. And now, all of a sudden, we’re trying to navigate something we've never seen before. You have to do your best work.”
Developing an edge
Managing the AIF gives Finance students an important competitive advantage in seeking professional employment and developing a meaningful career path. “Potential employers like the fact that Archway students have gone through this experience. They haven’t just studied the textbook, they've realized ‘My God, there's so much more than what's in the textbook,’ and figured out how to manage that,” Maloney notes.
“You have so much to talk about in your job interviews,” says Allen, who will be joining Fidelity Investments after graduation. “When they ask you, what do you know about investing? You can say ‘This is what we’ve actually done. This is what we bought and sold, and this is why we did it.’ When you can say that with confidence, I think that says a lot to an employer.”
“I’m proud of what I did as a portfolio manager for the Archway Investment Fund. But I’m even prouder of what all of us have done together.”
Through the hands-on experience provided in the AIF Program, students develop leadership, teamwork skills and presentation, as well as investment expertise. They are also given operational responsibilities for the other key functions performed in asset management organizations—ensuring they’re a step ahead as they start their careers. “The smartest person in the room isn’t necessarily the most effective person,” notes Maloney. “Being able to explain your insights and convince others why they’re valuable is incredibly important for young professionals.”
Taking part in the Archway Program can be a transformative experience for Bryant students. “From their very first day in the program to their last one, the change is incredible,” Ascioglu states. “Many of the students start out very nervous but by the end they are no longer nervous because they know their topics so well and they know they can excel at them.”
Archway program alumni are among the program’s most enthusiastic supporters, and they provide career advice, mentoring, and employment opportunities to current Archway students. “What defines a good team is the culture of that team and how people treat each other. That’s one of the best parts of Archway. Each class lays the foundation for the people coming in after them, so they can continue the success the program’s had,” says Swart, who will be joining Brave Family Advisors after graduation. “I think the fund has proven itself with its track record and its alumni.”
Allen says that one of her favorite moments as an Archway portfolio manager was presenting the fund’s work at the end of the semester to an audience of faculty, fellow students, alumni and even Bryant President Ross Gittell, Ph.D, “I’m proud of what I did as a portfolio manager for the Archway Investment Fund,” she says. “But I’m even prouder of what all of us have done together.”