Student-Managed Investment Fund Takes on a Bull Market
With a $25,000 initial investment from donors, lots of technical acumen, and the enthusiasm that comes with testing your investment strategies with real money, the Student Managed Investment Fund (SMIF) is pushing the limits of what it means to learn finance in a collegiate environment. And students aren’t just about preparing for a career in financial services—the group is trying to grow its portfolio to lay the groundwork for future generations of students.
“Our goal is to turn the initial $25,000 into a million dollars someday,” said Zack Wilson, a finance major who researches which stocks SMIF should hold in its investment account.
Wilson is one of 10 students, split into four teams that vote on which stocks, bonds, and investment funds to buy and sell in the shared portfolio.
One of those teams is the Algorithmic Trading Team, led by Nhung (Emma) Pham, a business information systems major who has led the creation of custom software that automates investment decisions—like automatically buying a particular stock when it hits a certain price and selling once it hits a higher price. Through coding in Python, Pham can create more complex rules, such as monitoring a particular stock’s convergence and divergence lines and executing a trade the minute the two cross. These “crossovers,” as they are called in the industry, are used to estimate the performance of stocks and to predict coming changes in trend, such as reversals or breakouts.
All this innovation takes place in the College of Business’ new FinTech Lab, an investment research workroom designed to provide students with cutting-edge software and real-time trading observations.
While Wilson, Pham, and their peers recognize financial investments are a long-term game and they can’t overreact to the global economic pressures that affect the financial industry experiences every day, they are anxious to see how they compare to their collegiate peers. The group attended the Global Portfolio Competition last month, which provided students with opportunities to present real, managed investment portfolios and compare their performance with other individuals, teams, and universities. The plan is to compete in 2024.
Mentored by Jaycob Arbogast, director of the Center for Excellence in Finance at Chico State, the students report on their investment decisions to the University Foundation board and College of Business Dean Terence Lau.
For now, students also know they need to be responsible stewards of the portfolio, both by diversifying and growing the fund and making investments in positions that meet the University’s ethical standards. They want to continue to raise money so they can compete on the global stage, which Arbogast believes is entirely possible.
“The beautiful thing about a career in the financial industry is the results speak for themselves,” he said. “It doesn’t matter where you went to college. I believe Chico State students can be as successful and innovative as anyone in this industry.”