Student Managed Investment Fund

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 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 $1.25 million 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, who teaches and manages the program along with fellow co-founders 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.