Schmidthorst Student Managed Fund Continues to Go Beyond Business as Usual

Written by Bailey Smith, Schmidthorst Communications Intern

Finance and insurance students in the Schmidthorst College of Business have the opportunity to participate in the Student Managed Investment Fund analyzing stocks and making recommendations on the investment of a real portfolio of funds provided by the BGSU Foundation. Despite the unprecedented year, the Student Managed Investment Fund performed very well in 2020, beating the market.

The course, FIN 4360 - Portfolio Management and Student Managed Investment Fund, is instructed by Dr. Stephen Rush, assistant professor of finance. Eight undergraduate students and one graduate student managed a long-only equity portfolio worth about $725,000. The goal of the class is to beat the S&P 500 index, a benchmark widely used in the investment management industry, by researching and presenting undervalued stocks as well as tactical asset allocation between industries. Each student must convince the other students of their investment idea in order to change the portfolio, and the class must generate enough value in a single semester to outperform for the entire year.

Dr. Rush teaches additional portfolio management skills such as performance measurement and alternative portfolio construction. He also has risk management rules to ensure that the portfolio does not lose too much money if the student stock recommendations do not perform well. Aside from this, he does not influence the student decisions as long as they are using the valuation tools correctly, ensuring that performance is truly driven by students rather than by a professor.

Although it has been particularly challenging with the hybrid course format, the students’ hard work stands out. The class took advantage of the new visualization lab in the Maurer Center to integrate in-person and remote presentations. Over the 2020 calendar year, the fund returned 21.74% compared with a market return of 18.35%. The students beat the market with valuation skill rather than by taking on excess risk. The past year represents the continuation of excellent investment performance by previous classes. The portfolio has delivered a total of 51.95% over the past three years, or approximately 1% higher than the market each year. The Student Managed Investment Fund has been important in helping students get jobs in the investment industry.

Students:

Gayge Carroll

Travis Cring

Emilee Davis

Connor Ford

Janae Johnson

Carson Musser

Michael Ramirez

Marco Solis Hinojosa

Christopher Sullivan