For a select group of business students, the Student Managed Investment Fund is an opportunity to gain real-time experience in securities analysis and portfolio management by deciding how to invest $1.2 million.

The fund is open to senior finance majors as a capstone to their investment courses. Students apply as juniors and go through a lengthy process, including writing a detailed stock report and three rounds of interviews. If selected, they spend the final weeks of their junior year observing the outgoing fund managers before taking the helm in the fall.

Student managers then take a series of investment track courses, consisting of Financial Management, Fixed Income and Derivatives, Investments and Security Analysis, and Portfolio Management. They learn to evaluate a company and what to look for when investing. Last fall, they traveled to New York City to visit a variety of investment firms, including asset management funds, hedge funds, and banks.

“We got all of these tips and advice, right at the beginning of our SMIF tenure,” said senior Will Lynch, head of the growth fund. “We had a whole list of ideas about how to screen for stocks and what to look for when looking at companies.”

Each student is assigned a particular sector to monitor. They’re responsible for knowing the key players and companies, understanding the macro environment and its effect on the sector, and looking for attractive investments to add to their portfolio.

Students are split into two fund teams: one focused on growth-oriented investments, the other on value funds that are on discount. The two teams meet weekly to review their portfolio’s performance and pitch new investments. If a stock gets a majority approval from the fund’s managers, they can immediately buy $20,000 to $40,000 worth of stock.

Two faculty advisors sit in on the meetings and ask guiding questions, and an advisory board of local investment professionals is available for advice. But the final decisions are up to the student managers.

“The first time I logged in and looked at our bank account, it was surreal to realize, ‘Wow, I’m controlling that right now,’” said senior Natalie Null, head of the value fund. “There’s nowhere else — not even at an internship — where we would have this amount of leadership opportunity to make these decisions.”

The fund currently has about 35 holdings. Their portfolio has grown by approximately 15% — or $150,000 — since they inherited the fund. That growth is in line with benchmarks set by the S&P growth and value indexes.

“At first, it was daunting, like, are we doing this right? Are we messing everything up?” Lynch said. “But we’ve been making changes, selling positions, adding positions, and over the past few months, we’ve seen our decisions come to fruition.” 

In addition to the hands-on experience, SMIF also gives students a chance to build their professional network as they prepare to graduate. And, during their fall trip to New York, they met with several Richmond alumni about their experience with SMIF and how their careers have progressed since.

“I remember talking to someone from the Class of 2000 who lost half their portfolio in the dot-com bubble,” Null says. “It was interesting to hear from people who have been here before, the big events they were affected by, and how being in SMIF has helped them in their careers.”