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Texas State University

Student Managed Investment Fund

SMIF member presenting on year to date financial projections

Investing money in theory is one thing, but when a semester-long class assignment could mean gains or losses for an important Texas State University endowment fund, there is more at stake than just a grade.

That’s why undergraduate and graduate students are carefully selected each semester to participate in the Student Managed Investment Fund, or SMIF, at the McCoy College of Business Administration. Students in this real-world lab hold the fate of approximately $550,000 of McCoy Foundation money in their hands. The first class to make investment decisions started in 2006, using seed money of $100,000 from a $20 million endowment gift from the McCoy College of Business Development Foundation. 

Growth in the portfolio and additional contributions over the years have given the students a sizeable amount to invest. The endowment investment into the student-managed fund is now $75,000 a year. “We have real students managing real money,” says Dr. Holland Toles, a lecturer who teaches and manages the program with Dr. Ken Moon and Dr. Bill Chittenden. “The difference in our program (compared to programs at most other universities) is that we have a real client we have to report to.”

Each semester, 30 to 40 students apply and are interviewed for admission into the class. Typically eight to 10 students are admitted with another eight to 10 returning for a second semester to gain as much real-world experience as possible within the confines of their studies. The students have control over the buying and selling each semester, but those decisions are made as a class with guidance from the faculty. The group breaks into smaller sections to analyze business sectors and makes a class presentation on the strengths, weaknesses, and opportunities found in those sectors. That is followed later in the semester by an in-depth portfolio performance analysis and roundtable discussion. The class then decides how much to invest in each sector, giving the ones with the best prospective outcomes a heavier weight. The final step is to decide on which stocks to buy and which to sell. If the students are making the case to sell off an investment and put the money elsewhere, they have to justify their decision and not just sell an investment in order to buy something the current class prefers, Moon says.

Real-World Perspective

Through the process of buying and selling for the balanced portfolio of 75 percent equities and 25 percent fixed-income investments, the students are exposed to dealing with domestic equities, exchange-traded funds, international holdings, and derivatives.

Analyze BUsiness Sector
Analyze business sectors

Roundtable Icon
Roundtable discussion

Presentation Icon
Class presentation of analysis

Investment Icon
Class decides dollar amount investment per sector

Portfolio Analysis
Portfolio analysis

Buy & Sell Investment Icon
Class decides which investments to buy and sell

Photo of the Student Managed Investment Fund students at a competition

The Real Deal

Student investors’ strategy returns numerous competition honors