Published: March 31, 2022

Leeds professor delivers inaugural talk in Steven Lindstrom Pardo Memorial Finance Lecture Series.

Shaun Davies presenting at the podium. Students watching the talk can be seen in the foreground.

Leeds professor Shaun Davies opened his talk by explaining the daunting research and publication process, as well as the value new research offers to a classroom. He also shared stories of his friendship with Steve Pardo, his former student, pictured below right. 

Steve Pardo stands outside in a snowy mountain scene.For Shaun Davies, Steven Pardo was better known as “Game Seven.”

“I had him in class in fall of 2019, and he was a bigger guy, a presence—not just in size, but in terms of his voice in the room,” said Davies, associate professor of finance at the University of Colorado Boulder’s Leeds School of Business. “I like to banter with my students, and he was just a good, intellectually curious person.” 

When Pardo skipped class one day to attend the deciding seventh game of the World Series, featuring his beloved Washington Nationals, his absence was notable; Davies gave him the nickname right afterward.

“He was good at giving me a hard time, but in a good way,” Davies said. “Like saying a model we were discussing in class wouldn’t work the same way in the real world.” 

Pardo, who graduated in 2020, died of cancer last year, but his family has worked with CU Boulder to create a lecture series designed to honor the presence and intellectual curiosity he brought to life and Leeds.

“My son was a people person,” said Pardo’s mother, Cheryl Lindstrom, a radiologist in the Washington, D.C., area. “Steven was the type of kid who you’d be having lunch with him, and next thing you knew, you’d committed to going on a hike the next day, followed by driving to Pennsylvania to get fireworks for the Fourth, and then you’d be looking at plane tickets for the weekend. 

“He always wanted to involve people, and we felt a lecture would be a way of bringing people together while instilling his thirst for knowledge in future generations of students.” 

The Steven Lindstrom Pardo Memorial Finance Lecture Series is designed to be an annual event showcasing faculty research—when he was sick, Lindstrom said, Pardo asked Davies to share some of his research with him. Davies, who developed a relationship with the family after Pardo’s death, delivered the first lecture in the series on March 29.

Opacity in TDFs

In his lecture, Davies discussed his recent research on target-date funds, which he’s called a “phenomenal investment innovation,” though one saddled with high fees. A TDF provides investors with an evolving asset allocation designed to meet their needs at retirement, “but the average investor has no understanding of the fees they’re paying in these funds. This opaqueness is clearly unfair.”

Exchange-traded funds, on the other hand, offer passive management but very low fees. Davies and his co-author found they could replicate TDFs by building a similar basket of ETFs based on publicly available information about TDF holdings. These so-called “replicating funds” almost perfectly tracked TDF performance, but significantly outperformed them due to lower fees: From 2008 to 2019, Davies found TDF sponsors collectively overcharged nearly $30 billion. 

“This is about adding transparency to an opaque market,” Davies said.

The lecture was followed by a lengthy question-and-answer with the audience of about 100, which including a large group of students in the Delta Sigma Pi business fraternity; as a student, Pardo was president of the Leeds chapter.

Cheryl Lindstrom addresses the audience of students and faculty.“I hope these lectures help lower the barrier between faculty and students to encourage relationships,” Davies said. “Steve’s influence on my life was important; I’m so glad he reached out to me. I hope we are able to honor his intellectual curiosity by helping students appreciate the research insights their professors are making.” 

Prior to the lecture, Pardo’s parents hosted a group of their son’s friends for dinner at the Roadhouse, in Boulder. People traveled from the East Coast and beyond to attend the lecture; a large group also tuned in virtually. 

“We had two memorials for Steven—one in McLean and one in Boulder—and when we looked around the rooms, a lot of those people had graced our doorway,” Lindstrom said. “It’s not like Virginia is close to Colorado—but it seemed like every time someone was passing through, they’d want to come visit and see Steven. That’s just who he was.” 

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