An investment fund run through a pair of finance classes at the Farmer School reached a milestone this fall as it tallied $1 million in assets under management.
Started in 2018 with $300,000 in Miami University endowment money and bolstered by alumni gifts, the Student Managed Investment Fund classes are comprised of mainly finance and accountancy juniors and seniors. FIN 481 students research and analyze securities to create a diversified portfolio that seeks to mitigate risk while generating acceptable returns. FIN 482 students act as fund managers and make the final decision on investments and trades.
When finance professor Xi Liu took over as the professor overseeing the classes during the pandemic, the fund was at around $600,000. “The students are very excited about this milestone. Now we are actually a million dollar fund,” he said.
“We benchmark against the S&P 500, and the overall index performance was great over the past couple of years,” Liu said. “At the same time we are trying to explore some opportunities strategically. Deviating away from the benchmark we overweight and underrate certain sectors. That's how we add additional value on top of our current holdings.”
The fund’s objectives are to:
- Raise capital through its chosen investments that will be used to fund scholarships for potential students.
- Bridge the gap between theory and practice, enhance students’ understanding of financial markets, investment strategies, and portfolio management.
- Present exposure to CFA examination material.
“I took 481 last semester and really enjoyed the opportunity to work alongside other motivated business students and learn from more experienced sector leads. I chose to take this as my capstone largely due to the interesting and fast-paced work. Our stocks require industry research, financial analysis and valuation, and presentation skills, all of which are very applicable to a career in finance,” senior finance major Spencer Lavine said. “Reaching $1M is an exciting milestone, and I have no doubt that Farmer students will continue the momentum the fund has gained over these past semesters.”
“SMIF definitely taught me a lot about equity research, portfolio management, as well as institutional investing, senior finance major Elliot Nguyen said. “While I made mistakes along the way, I definitely learned from them, and was glad to hear that I was able to contribute to the million dollar milestone.”