Corporate financials are now affordable, educating tomorrow’s investors.
Professor Mike Phillips at California State University – Northridge, helped his students establish a student-run investment fund that today manages $3.5 million. The fund contains three portfolios – 1) an ETF (exchange traded fund); 2) a traditional common stock portfolio with an emphasis on growth and quality; and 3) an ESG (environmental sustainability growth) fund. Students conduct analysis for the latter two funds by analyzing public company financials and today, they rely on structured (XBRL) data for timely information to drive their investment decisions.
The students use online tools that serve up XBRL-formatted data and both the students, and Professor Phillips are confident they are getting the most current and timely data possible.
Data available through traditional commercial datasets, which was drawn from public company HTML filings, had a number of drawbacks for academic institutions and their students to access. The data was only available once a quarter, so updates were not timely. But the biggest issue for the students was that commercial datasets with sophisticated screening capabilities can be prohibitively expensive on a university budget.
Last year, Professor Phillips and his student investors began using XBRL-structured data through an online tool. Companies have been filing in XBRL format since 2009, so there is enough historical data in XBRL format so that it can be used as the key source for running the student portfolios. The switch to XBRL financials came at a significantly lower cost than traditional dataset, but still with robust analytical capabilities.
Since the students converted to the online XBRL tool, the data they receive is more timely. And because of the automation that structured data makes possible, data from new corporate filings is available to the students in a form that can be exported to Excel or analyzed online within minutes after the public company submits them to the SEC. The timeliness and lower cost are critical to making it possible for students to professionally manage a multi-million dollar portfolio.
Professor Mike Phillips noted “By using XBRL data, students added 100 basis points per year to the returns on their portfolio.“
Structured data makes timely, detailed data affordable for broader audiences – democratizing the availability of information. And most importantly, XBRL financials makes it possible for the accountants, financiers and investors of tomorrow, gain real-world experience in analysis.