Student Managed
Investment Fund

What is SMIF?

The Student Managed Investment Fund (SMIF) is a portfolio managed entirely by students at Dixie State University (DSU). It is an opportunity for selected students concentrating in finance to gain valuable experience managing an actual portfolio. SMIF is made possible by the University Endowment and private individuals. The activities of the Fund are supervised by at least one of the professors in the finance department and a professional money manager. Additionally, the Fund has its own advisory board composed of professionals from the field of investments, which meets once each academic year. Students enrolled in this class receive credit for three hours in the spring semester. The course is open to all students who have completed the prerequisites and are enrolled at DSU.

Students enrolled in the management of SMIF are structured into a hierarchy explained in the section titled “Structure.” The students accepted to manage the fund are entirely responsible for the investment decisions of SMIF. The analysts establish the stock selection criteria, research the prospective stocks, generate reports, make the decision whether or not to invest in the stocks, and execute the trades. The finance faculty member serves in an advisory capacity by answering questions as and when they come up and making presentations to educate the students on various aspects of investments. The final activity of the analysts is to compose an annual report and present it to the advisory board at its annual meeting. The annual report serves two basic purposes. The first is to present the details of how the Fund is structured and the philosophy behind it. Second, the annual report gives the next year’s managers detailed guidelines on how the Fund is to be run. The Fund and this document are dynamic and it is expected that both will change over time.

While students are given course credit for their service in the Fund, the structure of the Fund is not that of a traditional lecture-based course. The analysts are the drivers of the activities of the Fund. The structure outlined in this document describes the procedures that analysts must follow. However, the deliberations and decisions of the analysts are left completely up to them. The faculty advisor will help the students if they have questions; however, the faculty advisor will not determine the outcome. Within the guidelines of this document, the analysts have a great deal of latitude in their actions. A major objective of this program is the learning that occurs as the students struggle with the many important decisions that await them.

Fiduciary Responsibility

A fiduciary responsibility occurs when assets that are owned by one person or institution are held in trust and managed by another. A fiduciary is responsible for managing the assets in the best interest of the owner and not in the fiduciary’s interests. SMIF analysts make investment decisions that directly affect the value of assets owned by the university. Thus, the decisions made by the analysts should always be made in the best interest of the University. Given the nature of the Fund, a factor complicating this issue is the annual turnover of the analysts. The emphasis placed on documentation and the adherence to the policies stated in this document is an attempt to decrease the effect of the frequent turnover and increase the level of fiduciary responsibility.

Grading analysts on the basis of their investment performance combined with their short tenure in the Fund, may create a situation which could encourage behaviors inconsistent with fiduciary responsibility.

Therefore, analysts are not graded on their investment performance. However, they are graded on the consistency and diligence with which they apply their investment criteria in their decision process. Only those investments that conform to the Fund’s investment criteria and those with an acceptable level of risk are to be considered for inclusion in the Fund’s portfolio.

At all times, it is imperative for the analysts to realize that the portfolio they are managing is the property of the Dixie State College. SMIF analysts must exert the care and effort consistent with the responsibility that they have accepted.