Monday, December 31, 2012

Student Managed Investment Fund

Booth students have an incredible number of resources to prepare them for their professional goals. In addition to coursework and Career Services, there are also opportunities to obtain practical experience through student groups. This week, Elizabeth Bozek, a first-year student and member of the DSAC Communications team, describes her involvement with the Student Managed Investment Fund, which falls under the Investment Management Group umbrella.


One of the many reasons students come back to business school is to change the direction of their careers; one of the best things about Booth is the many ways students can develop a new skill set with relevant experience to make that switch. I came to business school to make the transition to finance and chose Booth for the school’s resources both in and out of the classroom. One of the organizations I got involved with was SMIF, the Chicago Booth student managed investment fund, which operates within the Investment Management Group. The fund started in 2006 as an initial commitment of $1M from the Chicago Booth endowment and gives students the ability to perform equity research and choose stocks for a real investment portfolio.

First-year students are selected to participate in the fund and become analysts. In their second year, students can move on to be the Portfolio Managers of the fund after an evaluation of their stock analysis abilities and investment management knowledge. SMIF also has two Chicago Booth faculty advisors who offer oversight of the fund’s functional activities and approval for the new stock selections and exchanges. Once a year, the three-member SMIF Alumni Advisory Board offers recommendations and gives feedback on the performance, asset allocation, stock mixture, benchmarking against the Wilshire 5000 composite. During the school year, the Portfolio Managers sponsor a variety of stock pitching opportunities and host training sessions in the areas of industry analysis, financial modeling and putting together a persuasive stock pitch. Since SMIF proceedings compose at least one of more scholarships to Chicago Booth students, the fund does a great job in providing genuine experience to its members.

Though I am only one quarter through my first year at business school, I have already been able to dive deep within the analytics of the stock I am responsible for. SMIF is currently in the exciting process of re-evaluating last year’s stock picks and making decisions on how to alter this year’s portfolio. The second-year Portfolio Managers have been very helpful in answering my questions and preparing me to develop a position on whether buy, sell, or hold. My experience as a SMIF analyst has definitely helped prepare me for the internship opportunities I would like to pursue this summer. Working on SMIF has introduced me to Bloomberg, FactSet, Capital IQ, and other research tools not used in the foundation courses most students initially take. The PMs have been particularly helpful in walking me through the structure of a valuation and encouraging me to develop opinions and theses on equities in the portfolio. These skills are the core of any equity research or portfolio management internship or fulltime position. I encourage anyone who has a deep interest in the market or who wants to make a career change to finance to join the Investment Management Group and pursue involvement with SMIF. A list of our current holdings can be found here.

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