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Student Managed Investment Fund (SMIF)
Welcome to The University of Texas at Dallas
Student Managed Investment Fund (SMIF). The fund is run by UTD students who
volunteer their free time to perform research on Dallas based companies, create
analyst reports, and to make investment recommendations. The goal of the fund is
to invest in Dallas based companies and to beat its benchmark index by 250
basis points (2.5%) annually. The SMIF benchmark index that it will compete
against is the Bloomberg Dallas Based Index (BDFX).
Focusing on Dallas based companies
is a new approach that is being taken in order to achieve an advantage over
other Student Managed Investment Funds that invest in companies that are spread
out all over the country and even the world. This type of investing strategy
results in a zero sum advantage. In fact, a recent research report published in
July 2007 shows that; ‘On average, stocks with no media coverage out-perform
stocks with high media coverage by 0.23% per month after controlling for
Fama-French 3-factors, momentum, and liquidity. Among small stocks, stocks with
low analyst following, and stocks primarily owned by individuals, the
risk-adjusted premium is 0.65%-1% per month.’ (Fang and Peress, 2007). Many
companies in the Dallas area range in size from small cap to large cap and are
not heavily covered by analysts. This provides The SMIF a unique opportunity to
approach these companies, sit down with management, and to get their outlook on
the business and its growth opportunities. Such site visits will also
strengthen UTD’s relationships with the local business community.
The investing philosophy of the fund
is to not focus on hitting home runs, but to avoid striking out. In doing so,
the SMIF will invest in companies that prove to have durable competitive
advantage, is managed by good management, and is poised to do well in many
economic climates. By investing in these companies over the long term, the fund
will be best prepared to beat its benchmark.
Other
Universities
University
of Texas at Austin - MBA Investment Fund
University of North Texas - Student
Investment Group
Texas Christian University - Educational Investment Fund
Baylor University - Phil Dorr Fund
SMU - Ann Rife Cox Endowment Fund
University of Houston - Cougar Fund
Contact
Jeff Harrington for more information.
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