Student Managed Investment Fund

Real Money. Real Results.

The Student Managed Investment Fund (SMIF) within the Nistler College of Business presents students with a unique opportunity to actively manage and administer an investment portfolio with access to Bloomberg terminals. This hands-on experience in finance involves the management of an investment portfolio exceeding $2 million, as opposed to simulated exercises. It is noteworthy that this experiential learning initiative is exclusive to merely 30% of business schools nationwide, underscoring the distinctive and valuable nature of the program. The tangible and applied knowledge gained through this endeavor significantly contributes to students' comprehension of financial principles.

Students work in small groups conducting research and analysis of different companies and securities. They then present formal investment recommendations to the Professor and students. Students are responsible for managing all aspects of the Investment Fund: research, Portfolio management, and trade execution. The faculty advisor, drawing upon years of valuable real-world experience, plays a pivotal role in guiding students, ensuring their learning experiences are enriched with practical insights from the field.

This provides enormous benefits to the members of SMIF by allowing students to practice the skills they have learned in their academic careers. In addition to improving those quantitative and qualitative research skills, the SMIF will also help to advance career opportunities after graduation. This is all possible thanks to donations from three very generous parties. James and Nancy Seifert donated $100,000 to the SMIF in 2005. Lee Stenehjem donated $500,000 to the SMIF in 2006. Robert Foley donated $100,000 to the SMIF 2007, another $100,000 in 2009, another $100,000 in 2010, and another $50,000 in 2010.

Investment Strategies

Our core investment strategy centers on identifying undervalued securities, holding them until market value realization. We meticulously monitor macroeconomic trends like interest rates, Federal Reserve policy, inflation, and overall economic health. Our performance goal is to consistently surpass benchmark indices (i.e., S&P 500) net of fees, maintaining a low-risk portfolio structure. Achieving this involves investing in conservatively financed, undervalued companies displaying substantial growth potential. Rigorous risk management is crucial, with active exposure closely monitored against the benchmark.

Student Analysts enact this strategy with a top-down philosophy, identifying major economic trends and advantageous sectors. After determining sectors likely to outperform, focus shifts to selecting optimal companies within. This process emphasizes fundamental research for stock decisions, establishing target prices based on analyses. The weight of each security in the portfolio aligns with desired industry exposure, guided by the investment team's strategic goals.

History

The SMIF has been financially supported by the generous contributions of three parties. In the fall of 2005, James and Nancy Seifert donated $100,000 to the SMIF, followed by a $500,000 donation from Lee Stenehjem in the spring of 2006. Subsequently, Robert Foley made contributions of $100,000 in the fall of 2007, an additional $100,000 in January 2009, another $100,000 in January 2010, and a final $50,000 in the fall of 2010. These funds form the basis for four portfolios referred to in SMIF documents as the "Seifert/Foley Equity Fund," the "Stenehjem Balanced Fund," the "Stenehjem Bond Fund," and the "Foley Bond Fund."

At the end of 2021, all accounts were merged into one account that holds positions in all types of publicly traded securities. The SMIF actively seeks donors to augment the value of managed funds and is also in search of sponsors to cover operational expenses.

Performance

SMIF vs S&P 500 Annual Returns

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SMIF Annual Balance

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Recent Investment Competitions SMIF Students Participated

• The Game Forum takes place in New York City and allows students to compete based on the SMIFs performance over the previous year. The forum also gives students the unique opportunity to interact with industry leaders and learn best practices in investment management by expanding their knowledge in the global economy, global markets, alternative assets versus equities, corporate governance, and Federal Reserve Perspectives. In 2016, the group placed first in both bond portfolio and alternative funds.
• The CFA research challenge has students working with a faculty advisor and industry mentor to value a stock, write a research report, and present their recommendations. Their work is then evaluated at a local level by CFA society members and the winners advance to the sub-regional, regional, and global competitions.
• The ENGAGE UIC takes place in Detroit, MI and is the world’s largest investment competition where students compete based on portfolio performance. Students gain valuable insights from featured speakers that are among the best and brightest in corporate America, government, and the financial media.
• The RMA Credit Analysis Competition takes place in Fargo and provides an excellent opportunity for students to network with local banks. Groups are paired with a mentor from a local bank to provide insight and guidance and are then tasked with identifying and mitigating the credit risks that banks face when lending to small businesses.