Hard Work Yields Dividends for KSU Student Managed Investment Fund at Chicago Competition
KENNESAW, Ga. (Nov 22, 2019) — For nearly 10 years, Kennesaw State University’s Student Managed Investment Fund (KSU SMIF) has given undergraduate students supervised control over an actual six-figure investment portfolio to hone the skills they learned in the classroom. With only minimal guidance from faculty, students in the SMIF have more than doubled the fund’s value and regularly excel in regional and national investment competitions such as the CFA Research Challenge and Quinnipiac Game Forum.
On Oct. 31, KSU SMIF members Nicholas Busson, Solomon Dodson, Luis Ramirez and Thomas Young took first place in the Kaplan Poster Session Competition, which was part of the Student Managed Investment Fund Consortium Conference in Chicago.
Twelve teams presented posters outlining their funds’ financial performance, with judges awarding points based on that performance, as well as on the poster’s visual design and the students’ ability to respond to questions. Performance was the highest-weighted category and was based on each fund’s Sharpe ratio, defined as a fund’s returns relative to its risk. Kennesaw State’s Sharpe ratio of 0.48 puts it among the highest of all the competitors.
“If you have high risk and high returns, that’s not necessarily a good thing,” says Busson, a senior finance major and the fund’s chief investment officer. “You want to have high returns and low risk. Our fund has strict investing criteria. A company has to have $2 billion in market cap. We don’t invest in tiny startup companies or in companies who have a lot of debt… We adopt a macro economic outlook that’s a little pessimistic.”
In addition to their conservative investment strategy, members of the Kennesaw State SMIF also credit their competitive advantage to the unique makeup of their organization compared to other colleges’ SMIFs. While most SMIFs are either student clubs or academic classes, Kennesaw State’s SMIF is neither. Instead, it is an LLC owned by Kennesaw State with high-achieving students holding leadership positions.
“I think that’s why we put in that extra effort,” says Vinny Rosamilia, the fund’s vice president of human resources who graduates in May with a degree in finance. “Students at other schools have to be there for course credit, so they put out a product similar to what everybody does as part of a semester project. For us, we want to do as great as possible because we aren’t getting anything out of it other than experience.”
Their structure also means students are often active in the SMIF for years, rather than for a single semester.
“One of the problems other funds have is, because it’s a class, once you’re done with the class, you’re not really in it anymore,” Busson says. “An advantage we have is that the older, more experienced members can teach the younger members what we know and compound the knowledge.”
The SMIF began trading in 2010 following a generous $100,000 donation from G.W. Henssler & Associates. Students are responsible for researching potential investment opportunities using a variety of methods, including accessing real-time financial data on their Bloomberg computer terminal and soliciting input from a board of industry advisors. WellStar Health Systems CFO Jim Budzinksi, Bloomberg Sector Head Anurag Rana, Henssler Financial CIO and KSU Alumni Troy Harmon, and Oak Ridge Investments SVP Walter Stackow are among the board members.
Once they identify and research businesses to invest in, the students make formal presentations to the entire firm, including other students, advisors, and the board of directors, comprising four faculty in the Michael J. Coles College of Business. The directors have final approval over all trades.
To date, the KSU SMIF has increased the value of the portfolio by 150 percent to roughly $250,000.
Dr. Govind Hariharan, Chairman of the KSU SMIF’s board of directors and faculty advisor, says this system of self-rule teaches students valuable skills that will help them succeed in business regardless of whether they pursue careers in finance.
“Students don’t just learn how to do great research,” says Hariharan, “they learn how to present in a business environment and get their point across. The transformation is really impressive to me. When you see students presenting for the first time, they are close to freezing up. By the time they get into their second semester, the growth in their knowledge and confidence is very visible.”
The Kaplan Poster Session competition is not the only time that Kennesaw State’s SMIF has earned national recognition. Each year the organization competes in the Quinnipiac Game Forum in New York – where they won the best growth portfolio award in 2014 – and hosts the CFA Institute Research Challenge Southern Classic, which they won in 2017. Competitions provide SMIF students with opportunities to demonstrate their talents and interact with peers and finance industry insiders.
Alumni of the organization are now well into a successful career at prestigious firms such as Voya, Wells Fargo, JP Morgan, Bank of America, United Parcel Service and Intercontinental Exchange. As the KSU SMIF prepares to recognize its upcoming tenth anniversary with an awards ceremony in March 2020 and the launch of a KSU SMIF alumni association, students in the program are eager to continue growing the organization.
One way they are doing that is by emphasizing KSU SMIF’s value as a career-readiness tool. Students in the organization learn to write a compelling resume and cover letter, conduct an interview, and carry themselves during high-stress business meetings.
“A lot of those business skills you aren’t going to learn in the classroom,” says Rosamilia.