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Wealth Management
Florida's student-managed investment funds ...
Barry University
Miami Shores
- Program: Barry University Student Managed Investment Fund
- Faculty adviser: Stephen Morrell
- Year started: 2012
- Structure: About 20 to 25 students per year are selected to participate, mostly juniors and seniors.
- Size of fund: $684,000. Barry University’s board of trustees established the fund with money from the university’s endowment.
- Structure: Students make pitches. An investment committee of six makes final buying and selling decisions. Comanaging directors oversee all activity. The fund is governed by an advisory board of investment professionals, alumni, trustee members and business community members and faculty.
- Perspective: “We have added depth to their education by giving students real-life practice in their field,” Morrell says.
- Performance: “We recently had a cash injection, but that doesn’t come in every year. We are proud that we have outperformed our benchmarks over one year, three years and five years.”
- Partnership: Now in its sixth year, the fund partners with William H. Turner Technical Arts High School to teach a yearlong course in financial literacy to high school students.
STUDENT PERSPECTIVE
Tomas Espinal
Barry University
Former Managing Director, Student Managed Investment Fund
Tomas Espinal became interested in participating in Barry University’s investment fund during his junior year. “One of the first things I learned is that because it’s real money, mistakes don’t go over well,” he says. Espinal started as a research analyst in the health care sector, and by the last semester of his senior year, he became managing director. “I had to prepare and present the reports the same way as when the professionals from a big bank report their performance to the university for the endowment funds they manage.”
Espinal says students who participate in the fund meet professionals at many of Miami’s financial firms who offer career and investment advice. “They are open to helping you, and that’s important when you are breaking into the industry from a small school,” he says. In 2018, Espinal says he and his classmates came to appreciate the impact of a sudden market decline on a portfolio. Though the overall value of the fund dropped, “we were probably down 2% or 3% compared to the market, so that’s pretty good.” Espinal says his personal investment philosophy mirrors Warren Buffett’s: Invest in businesses, not stocks. A year ago, Espinal says he would have invested in technology stocks, but today he prefers undervalued investments. Espinal graduated in December and is working part-time at a local financial firm while studying for the chartered financial analyst (CFA) exam. His goal is to become a financial analyst for a large investment firm.
Florida State University
Tallahassee
- Program: FSU Student Investment Fund
- Faculty director: Steven Perfect
- Year started: 2008
- Structure: The Student Investment Fund is managed by about 40 graduate students in the fall and spring and by about 20 undergraduates in the summer. The students are responsible for the management of the portfolio. Students perform research, pitch stocks to an advisory committee, make buy/sell decisions and develop routine reports.
- Size of fund: $3.8 million
- The fund: About 79% of the fund is equities, with the remainder invested in fixed-income securities and cash. One individual stock at time of purchase can not represent more than 5% of the fund.
- Perspective: “The fund was long on tech stocks in 2018, which put us ahead of benchmark for most of the year, but then they fell more than other stocks at the end of the year, so we ended down,” Perfect says. “I don’t suggest stocks or strategies, but occasionally I say, ‘Geez I’m glad it’s not my money.’ ”
Rollins College
Winter Park
- Program: Crummer SunTrust Portfolio
- Faculty directors: J. Clay Singleton; Koray Simsek
- Year started: 1999
- Structure: Managed by Rollins College MBA students as part of the Portfolio Management Course offered each spring. The fund trades only once a year. At the end of the semester, students present their recommendations to a panel of investment professionals who review their work before they make their trades.
- Size of fund: $1 million
- Fund performance: The annual return was 13% vs. the S&P 500 index return of 15.7%.
- Distributions: The portfolio funds scholarships to the Crummer Graduate School of Business. It has distributed more than $300,000 in scholarships and will give away $50,000 in 2019.
- Allocation: 30% equity, 59% ETFs, 10% bonds and 1% cash
- Perspective: “Our program is very different from others around the country. We are in portfolio management, not securities training,” Singleton says. “It is designed around the S&P’s 11 sectors, and each sector has its own student manager. 2018 was good until the end of year, when everyone took a dip. However, our historical performance is great. We started with a gift of $500,000, and since then the portfolio has grown to a million dollars.”
- 2019 strategy: Singleton says the class is using two themes to guide its securities selection: The trend toward sustainability and sustainable products such as solar panels. And the trend toward a rise of the global middle class, placing a demand on health care, transportation and telecommunications. “We are positioning the portfolio to take long-term advantage of those trends because we only trade once a year.”
Stetson University
DeLand
- Program: Roland George Investments Program
- Faculty chair: K.C. Ma
- Year started: 1980
- Structure: Students research stocks and bonds. They make buy and sell recommendations to a seven-member board. The board accepts about 25% of the recommended stock buys (about six a semester) and approves one out of five bond picks. Students determine the investment strategy every semester by looking 12 to 18 months ahead.
- Size of fund: $3.5 million
- Requirements to participate: Finance and investment courses and a 3.0 GPA
- Perspective: “I tell students, ‘this is your real job. Your decisions have consequences. Don’t get us sued.’ ” Although Ma has experience managing portfolios, his role is more that of a risk manager, he says. “I am there to make sure they run the portfolio legally and professionally.”
- Performance in 2019: Stocks up 14%; bonds up 2.5%
- Strategy for 2019: Move toward more blue-chip, dividend-paying stocks; concentrate fixed income in bonds with higher coupon rates.
University of North Florida
Jacksonville
- Program: Osprey Financial Group
- Faculty director: Reinhold Lamb
- Year started: 2002
- Structure: Student analysts pitch buy/sell recommendations to each other and need two-thirds agreement to make a change. Students are accountable to the UNF investment committee. The fund invests in equity and fixed-income securities.
- Size of fund: $1.1 million
- Perspective: “Our students are accountable to the client, which is the university foundation,” Lamb says. “If the portfolio is down 6%, the foundation doesn’t look at how we did against zero. The foundation will say, ‘how did the benchmark do?’ Over 17 years, the students have more than doubled the value of the portfolio. One fund just invests in sectors, another just invests in geography, another invests in individual stocks and another in fixed income. Each has a benchmark and is managed separately but within the larger portfolio.”
Read more in our April issue.
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