Student-managed Investment Research Articles

Student-Managed Investment Funds Turn Pro: Innovation, Benchmarking, and Performance

Student-Managed Investment Funds Turn Pro: Innovation, Benchmarking, and Performance

Jesuit Educational Principles and Student Managed Investment Funds

Jesuit Educational Principles and Student Managed Investment Funds

Can a student-managed fund transfer expert financial knowledge? Examining trustee voting consensus in a student-managed investments program

PurposeThe “experience is the best teacher” model assumes that acquiring expertise in a given domain reduces biases. Research in expert knowledge in investment decisions has shown better ability to produce improved results in asset selection or portfolio returns. Universities created student-managed investment funds (SMIFs) to train students in portfolio management as fiduciaries. However, analyses of the effectiveness of the SMIF as a medium for expert knowledge transfer have not been done.Design/methodology/approachThe authors’ analyze an SMIF's structure against established models of expert knowledge transfer, using the voting patterns of the trustees of the fund from the recorded minutes of the fund's meetings to show the fund's structure and outcomes demonstrate effective knowledge transfer. Voter consensus between faculty and student trustees is one proxy the authors use for knowledge transfer.FindingsConsensus between faculty and students was uniformly high across all recommendations. Chi-square tests were employed to test for independence between approval of recommendation and level of consensus, showing dependence in most cases. Analysis of sale returns over the 12-year sample period showed significantly better performance of asset sales over relevant benchmarks for both equity and fixed income portfolios.Originality/valueMost analyses of SMIF structure concentrate on well-known issues with things like student turnover, summers or other structural issues. Performance is evaluated based on returns. This study looks at the SMIF as an expert knowledge transfer medium and examines expert/novice decision approval in terms of knowledge transfer.

An Example of Innovative Teaching: How to Start and Run a Financial Investment Company from a Finance and Accounting Perspective?

An example of an account of practice is presented in this paper. Such action learning methods are highly desired in the attempts to make our courses experiential. Specifically, this project is a new idea for applying and enhancing an undergraduate Capstone Finance course (F444) as well as for a Graduate Financial Management Course (F542). This project guides students to start a new investment company in the State of Indiana and then run it during the semester. As part of an advanced financial course, students maintain and grow an actual portfolio of securities, called Student Managed Investment Fund (SMIF). Hands-on training of this kind is expected to lead to stronger learning of concepts, better application of theories, and significantly more student satisfaction.

Reluctant Investors: A Behavioral Experiment

Private wealth managers are often challenged to help reluctant clients make investment decisions in nondiscretionary accounts. Investors may be hesitant, or even too eager, about the price and timing of specific investments. This investor behavior challenges wealth managers on a daily basis. We designed an experiment to seek out remedies in the setting of a university student–managed investment fund with novice undergraduate student investors. Over 3 years, more than 400 investment decisions were made. More than 220 decisions would not have been made were it not for our suggested remedy. Our sample includes more than 100 individual investors and a portfolio size of $1 million in real funds. Our solution for hesitancy is offering cash covered puts for investment purchases and covered calls for investment liquidations. We find that having a third option of buying or selling with covered options largely alleviates decision-making anxiety for our sample investors. As a bonus, this option trading activity made the portfolio significantly more profitable during this 3-year experimental period from 2017 through 2019.

Student-managed investment funds (SMIFs) in India: the perspectives of student fund managers

PurposeThis paper aims to explore how the student fund managers perceive the benefits of being part of the fund. Furthermore, this paper examines the country-specific challenges of setting up and managing a student-managed investment fund (SMIF) in India.Design/methodology/approachQualitative content analysis technique is used to identify, compare and retrieve critical themes about the present state of SMIF clubs in India. The data collection method involved structured, in-depth online interviews with ten student fund managers from various higher educational institutions in India.FindingsSome of the study’s key findings indicate that the existence of SMIFs as part of learning facilitates group decision-making and peer learning. Additionally, this study brings to light specific issues related to registration, incorporating real-world practices and integrating SMIF into the academic curriculum.Social implicationsThe outcomes of this study shall be of use to students and the teaching fraternity across Indian colleges and universities who aspire to set up SMIFs as part of experiential learning. This study will also help existing SMIF clubs in India understand how their counterparts work and can consequently improvise their organizational structure and functioning.Originality/valueTo the best of the authors’ knowledge, this is the first interview-based evaluation of the present structure of SMIFs structured as clubs in India.

CASE STUDY: Socially Responsible Investing in a Student-Managed Investment Fund

Effective incorporation of socially responsible investing (SRI) into student-managed investment fund (SMIF) programs is discussed in the context of a case study. The experience of the example SMIF suggests some techniques to enhance the learning experience, such as students developing their own SRI policy; team-based discussion to draw out a range of viewpoints and to capture the values of the students and broader society; integration of SRI into investment analysis and decisions while limiting reliance on environmental, social, and governance ratings; and a fostered awareness of the context in which the SMIF operates, including the SRI policy of the sponsoring university and how SRI intersects with reputation risk. Focus on sustainability can be enhanced by setting long-term objectives, establishing key values that are linked to grades, and adopting an overlapping student cohort structure where seniors instruct juniors. A central theme is that embracing and directly addressing the subjective nature of SRI provides opportunities for deep learning by students.

Implementing a student-managed cryptoasset fund in a finance curriculum

PurposeIn 2004, Roanoke College began offering a Student-Managed Fund course, wherein students were able to manage a portfolio of equity and fixed income using real money. While not a widely adopted concept at the time, it has since become quite common in finance programs, either through courses or clubs. In February 2019, the author supplemented activities in the course with the addition of real cryptoassets for students to manage. The paper discusses the design, implementation, and pedagogical advantages of the fund.Design/methodology/approachThe paper expands on the existing literature regarding student-managed investment funds (SMIFs or SMFs) by presenting a case study on the implementation of a student-managed cryptoasset fund at Roanoke College.FindingsThe value of experiential learning through student-managed funds (SMFs) is well established. Thus, these programs have become much more common in recent years and are now often expanding to securities beyond equities and bonds. The introduction of cryptoassets to be traded by students at Roanoke College is another step in improving students' exposure to various markets and appears to further improve research and critical thinking skills.Originality/valueThis is certainly one of the first, and to the author's knowledge may be the only, real money cryptoasset fund managed by students.

Socially Responsible Investing in a Student-Managed Investment Fund: A Case Study

Socially Responsible Investing in a Student-Managed Investment Fund: A Case Study

Creating and Managing a SMIF Club That Invests Exclusively in Mutual Funds

Extant literature suggests that many student-managed investment funds (SMIFs) restrict membership to a few knowledgeable students, develop skills unevenly across participants, and lack formal organization and/or execution. The reality is that most individuals and many financial advisors recommend investing through mutual funds for retirement, yet most SMIFs are designed for investing in individual securities rather than in mutual funds. This article fills this void by providing a detailed framework of goals, processes, and solutions for establishing a SMIF focused exclusively on mutual fund investments that is appropriate for all undergraduate business majors. The design here is appropriate for an audience without prior investment expertise that leads to competency in mutual fund analysis, selection, and asset allocation decisions.

Student-managed investment funds: seven mismatches and three recommendations

PurposeThe purpose of this paper is to investigate the embedded challenges of student-managed investment funds (SMIFs) and provide recommendations to work with these issues.Design/methodology/approachThe paper analyzes and critiques the ways SMIFs are structured and operated and makes several suggestions.FindingsThe paper details seven unique challenges of SMIFs compared to professionally managed investment funds. The source of these challenges is that SMIFs are set up for educational purposes, which makes the operation and management different from performance-focused investment funds. The paper proposes several recommendations on how to align the educational focus with fund performance.Originality/valueThe paper is original and based on primary research.

Can student managed investment funds (SMIFs) narrow the environmental, social and governance (ESG) skills gap?

PurposeThe purpose of this paper is twofold. First, it endeavors to document the current state of environmental, social and governance (ESG) pedagogy within undergraduate finance courses of business schools, and second, it seeks to show how business schools can leverage student managed investment funds (SMIFs) to swiftly integrate ESG pedagogy.Design/methodology/approachThe study is comprised of two sections that use different methodologies. The first part of the study involves a manual content analysis of undergraduate finance course textbooks, and related instructor materials are used to estimate the average coverage of ESG-related topics. Next, a case study of a SMIF that has recently integrated an ESG framework is provided to illustrate how this pedagogical innovation is effective in teaching ESG skills.FindingsThe findings of the content analysis of the three most commonly used textbooks in a sample of 17 Canadian universities, as well as associated instructor material, provide evidence that the primary emphasis in traditional curriculum remains on the shareholder, with little attention paid to ESG factors. The case study of an existing SMIF clearly demonstrates how a student-led development of an ESG framework provides the setting for effective, experiential learning.Originality/valueThis study shows that while traditional teaching settings, like lectures, may be slow to adapt to the rapidly changing needs of industry, nontraditional teaching venues, such as SMIFs, can be leveraged to meet industry demand for ESG skills, thereby closing the skills gap, enhancing student employability and increasing the relevance of business school education.

Student-managed investment funds: a review and research agenda

PurposeIn recent years, student-managed investment funds (SMIFs), experiential learning programs at an increasing number of universities, have attracted significant scholarly interest. In this article, we review the academic literature on this pedagogy.Design/methodology/approachWe use the systematic review method to assess a sample of 85 articles published in 30 journals during the period 1975 to 2020.FindingsOur literature review reveals four streams of research: best practices and challenges, investment management, innovation and trends and SMIFs in a research setting. We also propose future research directions, including specific gaps in the literature, a focus on innovations to traditional programs, systematic investment performance and expansion into behavioral finance issues.Originality/valueWe contribute a comprehensive view of the body of scholarship on SMIFs, identifying existing streams of research and future research directions that will help guide the development of SMIF research into a cohesive and productive space.

Student-Managed Investment Funds: An Exploratory Study of a Model That Works

Student Managed Investment Funds (SMIF), an experiential approach to learning about portfolio theory and practice, are increasingly prevalent in financial education in business schools (Boughton & Jackson, 2019). However, there is very little empirical evidence regarding the determinants of SMIF financial performance. Following a review of the literature, this paper presents an exploratory study of Gonzaga University’s SMIF model and results compared to nineteen other schools in a regional competition. The results suggest that SMIFs using a class structure and spanning more than one semester outperform those that do not. Implications for future SMIF research and practice are discussed.

Student Recommendations and Subsequent Stock Returns for Smif Investments

This paper measures the predictive power of buy-sell-and-hold recommendations made by students engaged in the management of a student-managed investment fund (SMIF). In their roles as analysts and portfolio managers for the SMIF, undergraduate students were required to follow traditional security analytical techniques such as discounted cash flow analysis and comparative valuation that were taught in the introductory investment management class, which is a pre-requisite. We evaluated the stock price performance of the stocks which the students analyzed across multiple holding periods, following student recommendations to buy, sell, or hold. We also compared the recommendations of the student-analysts to the contemporaneous recommendations of sell-side equity analysts.

Student Managed Investment Programs: Maximizing Learning Opportunities by Increasing Student Control

Student Managed Investment Programs (SMIPs) have been embraced by universities as a powerful learning experience. Although a large number of features have already been implemented by universities, SMIPs have potential for even greater educational benefits. In this paper, we argue students should be given increased control and responsibility for their SMIP to honor the intent of experiential learning and increase the breadth of their educational experience beyond direct money management. Maximizing the educational experience should be the design cornerstone, which can be accomplished through allowing complete student responsibility for the SMIP.

Variation in the structure and administration of student-managed investment funds

PurposeThe purpose of this paper is to understand the differences present in student-managed investment funds (SMIF).Design/methodology/approachThe paper uses primary data collected by survey and interviews.FindingsThe findings of this paper suggest that research efforts need to be focused on the topical area and transparency in the field needs to be improved.Research limitations/implicationsPast research is validated and future research is needed.Practical implicationsThe need to develop and disseminate best practices in the management of SMIF’s.Social implicationsStudent-managed funds are widespread and growing but operate as independent entities.Originality/valueThe paper is original and based on primary research.

Student-Managed Commodity Fund—A New Frontier in Experiential Learning

AbstractThis study provides a road map for creating and operating a student-managed investment fund (SMIF) as an experiential learning opportunity in commodity market analysis. We describe the reasons for implementing a SMIF and the benefits it offers relative to traditional simulation approaches. We outline the necessary steps for starting a SMIF and explain its organizational structure. We discuss a SMIF’s operation and main activities, which include recruitment, training, trading, and interaction with the client and alumni. The implications of participating in a SMIF are reviewed within a cost-benefit framework.

Student managed fund (SMF) at the University of Connecticut

PurposeThe purpose of this paper is to present a review of the student managed investment fund at the School of Business, University of Connecticut.Design/methodology/approachThe authors trace the history and growth of the fund and identify the special features and dimensions that have contributed to its success.FindingsThe operation of the fund is a constantly evolving program and the authors discuss the important changes and improvements made in the program since its inception in the early 2000s in response to growth in the number of finance majors, new career opportunities in the field of investments and most importantly, the strength of capital markets and the development of new instruments in the capital markets. The authors also discuss the common features of over 300 student funds in the USA. The authors close with a discussion of the limitations and constraints the fund advisors at, and possibly, at other schools, face in the management and administration of the fund, and also what developments and adjustments the authors expect to see in these funds in the future.Originality/valueThe authors combine extensive analyses of fund history and performance. The authors also provide some suggestions for the future direction and priorities for student funds.

Confessions of a faculty advisor

PurposeThe purpose of this paper is to describe how a student-managed investment fund (SMIF) moved from an idea to an operational program over the period of a year at Memorial University in Newfoundland, Canada. The aim is to provide insight to other institutions on how to build capacity when developing their own SMIF.Design/methodology/approachI summarize the choices made with respect to funding source, governance structure, faculty involvement, recruitment, investment activities and integration into curriculum.FindingsUnderlying these choices were challenges pertaining to capacity, student competencies, the existing finance program and ties to industry. Through the development of the SMIF, efforts ensured that capacity was suitably developed in each of these areas.Research limitations/implicationsThis paper provides insight to other institutions on how to build capacity while developing their own SMIF.Practical implicationsThis account provides the field with a unique perspective. It is written following a year spent developing a SMIF that is about to launch.Originality/valueThis account provides the field with a unique perspective. It is written by a new faculty member following a year spent developing a SMIF that is about to launch.