Presentation

Student Managed Investment Fund, Department of Finance

Gordon Ford College of Business building
Student
Managed
Investment Fund
Student learning experience, balanced with fiduciary responsibility.
PRESENTED BY
Dipesh Bhattarai
Kerron Joseph
Mia Merritt
Kevin O’Doherty
Gordon Ford College of Business building
PART 1
What and why
The case for a student-managed fund
01
What are we doing?
02
Why are we doing it?
03
Why do we need this when we have TVA?
04
What student learning do we expect?
05
Is this done elsewhere?
PART 1 · WHAT AND WHY
What are we doing?
Giving students a chance to manage a real $1.5 million portfolio.
Equity-only portfolio
Managed by students in FIN 439, Security Analysis & Portfolio Management
Benchmarked against the Russell 3000
$1.5M
REAL CAPITAL
R3000
BENCHMARK: RUSSELL 3000
6
SECTOR TEAMS
11
S&P 500 SECTORS
PART 1 · WHAT AND WHY
Why are we doing it?
The best way to learn investing is by doing it.
Elevate student experience
Managing real money brings an interest and seriousness that no trading simulation can match.
Provide hands-on learning
Students do the real work of analysts and portfolio managers, much like an internship inside the classroom.
Career readiness
Graduates leave with real portfolio experience and a track record they can show employers.
PART 1 · WHAT AND WHY
Why do we need this when we have TVA?
TVA INVESTMENT CHALLENGE
SMIF
Who takes part
About 10 students, selected by application
Broader: every FIN 439 student, about 36 a semester
What students hold
Large-cap equities, benchmarked to the S&P 500
Large, mid and small caps, benchmarked to R3000
Who keeps the gains
Reset to $500,000 each year; gains go back to TVA
Gains stay in the CHF portfolio
Who sets the rules
TVA, fixed for all schools
SMIF Oversight Board, built for teaching
PART 1 · WHAT AND WHY
What student learning do we expect?
Equity research
Industry analysis, financial statements, and valuation
Professional writing
Buy-side analyst reports that defend a decision
Portfolio management
Sector weights, position sizing, and risk
Fiduciary discipline
Compliance testing against written policy
Communication
Presenting and defending ideas to decision-makers
Teamwork
Shared accountability for real results
PART 1 · WHAT AND WHY
A proven model nationwide
Student-managed funds are now common at universities and their foundations.
STUDENT-MANAGED FUNDS IN THE U.S.
~600
LARGEST FUNDS, ASSETS AT 12/31/25
1
University of Dayton
$86M
2
University of Minnesota
$54M
3
University of Virginia
$38M
4
Notre Dame
$31M
5
Northwestern University
$30M
OUR REGIONAL PEERS
University of Kentucky
Gatton Student Managed Investment Fund
Funded from the UK endowment and presented to the UK Board of Trustees; several million dollars, run through FIN 485 and FIN 490.
University of Tennessee
Haslam Torch Funds
About $3.5 million across four donor-funded portfolios, run as a credit-bearing finance course.
University of Alabama
Culverhouse Investment Management Group
An equity-only, value-based portfolio of more than $2.5 million, overseen by an advisory board and faculty advisors.
Sources: ~600 funds nationwide, NACUBO estimate via Commonfund (April 2026); Center for Investment Research, SMIF Rankings (AUM as of December 31, 2025); UK Gatton College; UT Haslam College of Business; UA Culverhouse.
Gordon Ford College of Business building
PART 2
How
How the Fund runs, in detail
01
The Base Camp Model
02
What the Fund may hold
03
Operation and oversight
04
Guardrails and risk controls
05
Our partner: Cerity Partners
06
How we measure and report
07
Implementation plan
PART 2 · HOW · THE PORTFOLIO
The Base Camp Model
Fund capital
$1.5 million
Sector ETF
the “base camp”
Student selections
individual stocks
day one
approved buy
sale proceeds
PART 2 · HOW · HOLDINGS
What the Fund may hold
PERMITTED
Sector ETFs
One per GICS sector, tracking its S&P 500 sector, expense ratio of 0.10% or less. Intended: Select Sector SPDRs.
Individual stocks
U.S. common stock in the team’s sectors: market cap of $300 million or more, $10 million+ daily volume, NYSE or NASDAQ.
Cash
Target no more than 2%, never above 5%. Dividends stay in their sector and are reinvested in its ETF each month-end.
PROHIBITED, WITHOUT EXCEPTION
×
Derivatives of any kind
×
Short selling
×
Margin or leverage
×
Leveraged and inverse ETFs
×
IPOs within six months
×
Cryptocurrencies
×
Private placements
×
Fixed income (beyond cash)
×
Securities lending
PART 2 · HOW · OPERATION
Operation and oversight
Oversight Board
Faculty Advisor
Students
reports back; amends the IPS when needed
Set rules
IPS, limits and benchmark
Research
Analyst report and pitch
Vote
Five other teams vote
Approve
Verify and veto
Trade
Sole authorized trader
Check
Two teams each month
Review
Performance and compliance
PART 2 · HOW · GUARDRAILS
Guardrails and risk controls
Pre-trade compliance
No trade without a checklist verified by the Faculty Advisor.
One account, one trader
Only the Faculty Advisor places trades. Students never access the account.
Liquid securities only
Sector ETFs and stocks of $300 million or more with deep daily volume.
Trading limits
30-day minimum hold, no day trading, and at most 25% turnover in any sector per semester.
Position review
A 25% drop from cost triggers a written re-underwriting: hold, trim or exit.
Month-end testing
Two teams test the full portfolio; CHF receives monthly compliance reports.
Breach remediation
Any breach is fixed within 30 days and reported to the Oversight Board.
Maintenance Mode
No new positions during breaks; the Advisor keeps monitoring every holding.
Conflicts of interest
Disclosed in writing, with recorded recusals; no material nonpublic information.
PART 2 · HOW · OUR PARTNER
Our partner: Cerity Partners
2009
FOUNDED
$160B+
ASSETS UNDER MANAGEMENT
23
STATES, INCLUDING KENTUCKY
50+
KENTUCKY COLLEAGUES ARE WKU ALUMNI
COMMITMENT TO WKU
Already invested in WKU
A major gift in September 2025 named the Cerity Partners Financial Planning Program.
Beyond the classroom
Internships, mentorships, capstone projects and experiential learning for WKU students.
ROLE IN THE SMIF
A seat on the Oversight Board
A second set of eyes
Professional guidance
Sources: Cerity Partners press release (September 23, 2025); assets under management from SEC Form ADV data via SmartAsset (April 2026).
PART 2 · HOW · REPORTING
How we measure and report
TOTAL FUND
Outperform the Russell 3000 Total Return Index over rolling three-year periods, net of costs
EACH TEAM
Student selections outperform the sector ETFs they replace
STUDENT LEARNING
Quality of analyst reports, compliance reports, and presentations
Monthly
Two independent compliance reports, reconciled by the Faculty Advisor
Annually
Written report to the Oversight Board: performance versus benchmark, attribution, full trade log, breaches, and a signed compliance attestation
PART 2 · HOW · NEXT STEPS
Implementation plan
Nov 12, 2026
Approval
CHF Board
Dec 2026
Setup
IPS and account
Jan 2027
Transfer
CHF transfers $1.5M
First week
Deployment
Into 11 sector ETFs
Spring 2027
First stocks
Up to 20% per sector
2027 to 2028
Phase-in
40%, 60%, then 80%
MAXIMUM SHARE OF EACH SECTOR IN STUDENT STOCKS; THE REST STAYS IN THE SECTOR ETF
Spring 2027
20%
Fall 2027
40%
Spring 2028
60%
Fall 2028 on
80%
YOUR ADVICE
Help us name the Fund
OPTION A
BRITE
Big Red Investment Training Experience
OPTION B
BIG RED
Investment Fund
Building Investors through Growth, Research, Education, & Discipline
Which name would you recommend to the Board?
Gordon Ford College of Business building
Thank you
THE SMIF IN ONE LINE
Every finance student, real capital, real accountability.
CONTACT
Dipesh Bhattarai
Department of Finance
dipesh.bhattarai@wku.edu