Academics

Investor Information

March 2016

Dear Investors,

During the Spring 2016 Semester, thirty highly driven undergraduate students acting as financial managers will take part of UMass Boston’s Student Managed Fund (SMF) program, also known as the Asset Management Practicum. The SMF program is divided into nine different market sectors led by Dr. Arindam Bandopadhyaya as the Faculty Advisor, and the elected Executive Committee team appointed by Dr. Bandopadhyaya.

Offered mainly to students in their senior year at UMass Boston, the portfolio managers actively manage the Fund by executing proven portfolio management strategies taught during the program in order to outperform the S&P 500 Index. Managers collaborate with their team members by developing thorough economic sector analysis, collectively deciding what allocation of each sector should be held by the Fund, and performing weekly analysis of stocks pitched to the team by each group representing all sectors of the US economy. After hearing each presentation for a common stock or equity index, specifically Exchange-Traded Funds (ETFs), the managers discuss the strengths and weaknesses of each investment, and decide whether the company or ETF should be purchased for the Fund.

Through the active management of the Fund, students are able to develop important skills that are crucial to success in the investment management industry. These skills include learning how to value companies through quantitative and qualitative financial models, constructing a well-maintained and balanced portfolio, and learning how to analyze performance through different analytical measures. This experience has helped past students recognize some of the main attributes that separate successful businesses from the unsuccessful ones. Furthermore, the tasks performed for the Fund serves to further develop communication, teamwork and presentation skills for the students who participate in it.

The Student Managed Fund organizes events and hosts guest speakers from the financial industry every semester to provide the team with insightful information on how to manage the Fund. Most importantly, these events and guest speakers provide insight of what a career path in investment management looks like and how to prepare for it. Some of the events and speakers for this and recent semesters are as follows:

  • Bloomberg Terminal Training Sessions with Dr. Arindam Bandopadhyaya, and Dr. Atreya Chakraborty
  • Fundamental vs. Technical Analysis – Presentation by Mr. Allen Hahn; Principal, ADH Advisors
  • Presentation by Mr. Douglas Cliggot from the UMass Foundation
  • Presentation on Economic Outlook and World Markets, by Christopher Probyn, Chief Economist at State Street Global Advisors
  • ​Presentation by Paul Herman, CEO of HIP Investor Inc.
  • Presentation by Carl Lacey, Vice President Institutional Equity Sales and Trading at National Alliance Securities
  • Presentation by John Minahan, Senior Lecturer in Finance and Associate Faculty Director of the Master of Finance Program at MIT Sloan School of Management
  • Trading Floor Tour and Presentation by Mr. Nick Bonn;  Senior Vice President, State Street
  • Tour and Presentation of the Stock Chart Room at Fidelity Investments, Patrick Torbert, Technical Research Associate; Fidelity Management and Research Company
  • Tour of Bloomberg Headquarters, New York City
  • Tour of the New York Stock Exchange- New York City


For the remainder of the Spring 2016 semester, we will implement a more mechanical and rigorous approach towards identifying and evaluating opportunities by placing stop losses and profit targets based on current market volatility. We will also conduct in-depth economic analysis on the global scale in order to have a well-rounded approach to minimize risks and maximize returns. Our hybrid approach will provide diversification given in-depth analysis and insight of changing domestic and international market conditions, and how we can maximize capital gains for long-term performance.

Economic outlook is an important aspect of investment decision making, therefore we will perform continuous analysis on domestic and international economies in order to make well-informed investment decisions for the Fund. There are key economic indicators that are important in light of recent global stock market volatility and ambiguous U.S. economic outlook reports. The main focus of our economic analysis is to determine whether the six-and-a half-year-expansion will come to an end, and how this will impact domestic equities. Our economic analysis includes, but are not limited to, the growing and declining U.S. sectors, impacts of the Federal Reserve interest rate increases, the strong US Dollar, and volatile emerging markets.

Amid the negative economic reports, there are a plethora of positive indicators that show the period of expansion will continue. These positive indictors include our economy essentially being at full employment, with a 4.9% unemployment rate,  increasing disposable income which rose to 3.5% annually in 2015, and total home value which is 7% higher than 2014. There are certainly negative economic indicators, such as the first decline in service-sectors since 2013, and volatile stock prices of domestic equities. One of the most concerning areas is the impact of weak demand and slowing growth in GDPs of global economies, especially in light of the strong US dollar which all but eases the high debt and declining growth of these countries. Overall, the Student Managed Fund will continue to analyze domestic and international economic outlooks in order to make the most well-informed investment decisions for the Fund.

Sincerely,
SMF Management