RSO Spotlight: Saluki Student Investment Fund and Graduate Student Investment Fund
December 12, 2016,
The Saluki Student Investment Fund (SSIF) and Graduate Student Investment Fund (GSIF) are two College of Business registered student organizations (RSOs) that provide students with hands-on experience in portfolio management and investment research.
As such, the SSIF and GSIF are modeled after a real investment management firm. Members are focused on making the best possible investment decisions on behalf of their primary client, the SIU Foundation, who also provides fiduciary oversight for both programs. The RSOs’ competitive advantages are the students’ unique and unbiased perspective and their ability to spot trends in the markets – especially those that are perhaps driven by (or favored by) their generation.
In implementing the RSOs’ investment process, members work in teams that research companies within specific sectors, such as the technology, financial or healthcare sectors. Each team’s goal is to choose the companies within their sector that give the portfolio the best chance to outperform the midcap equity benchmark. This requires students to put their class lessons to work within a professional environment. Moreover, students learn to collaborate and take responsibility for their analysis and decisions as they make the case for their investment ideas.
The SSIF was established in May 2000 through the generosity of Omar Winter and his wife Carol, both alumni of Southern Illinois University Carbondale. Winter provided $25,000 to start the investment fund. Shortly thereafter, the SIU Foundation provided $200,000 for the students to manage on its behalf – in essence, the SIU Foundation hired the SSIF as one of its portfolio managers. The goal of Winter and the SIU Foundation was to provide SIU undergraduate students with hands-on experience in portfolio management and investment research.
Since the SSIF was originally chartered for undergraduate students only, graduate students did not have the opportunity to learn more about business and investing through this hands-on experience…until now. Graduate students from the College of Business MBA and Master of Accountancy programs worked throughout the 2012-2013 academic year to propose the GSIF. These founding members met throughout the year to write the fund’s investment philosophy, engineer its investment process, and set forth its investment policies. The founding members presented their proposal to the SIU Foundation’s Investment Committee and received their approval in May 2014. The GSIF works closely with the SSIF to ensure the best investment decisions are made on behalf of their primary client, the SIU Foundation.
Timothy Marlo, who recently was named a faculty advisor for the RSO, explained on his role with SSIF and GSIF.
“Because of the caliber of student that is ‘hired’ to be in SSIF/GSIF, I am fortunate to work with extremely self-motivated students who are interested in learning about investment research and portfolio management,” Marlo said. “One of my key duties as a faculty advisor is to assign mentors – typically juniors and seniors – for all incoming SSIF/GSIF members. This knowledge is passed on from one generation of SSIF/GSIF members to the next generation. In addition to assigning and monitoring members’ progress, my role is to ensure that the funds operate as any quality investment management firm would. This requires presentations, quarterly and annual reports, operational policies and more, which are developed by the students. It has been a joy to watch the students willingly take on these roles in order to further enhance their academic journey.”
The SSIF and GSIF operate essentially as an investment firm, and the students in them manage real money for a real client. This is not a game or simulation and participation should be viewed similar to an internship. The SSIF and GSIF participants are responsible for choosing the investments in a portfolio. Members conduct research and analysis into eligible stocks, then try to identify the best stocks for the portfolio. The average total time commitment to the RSOs ranges from five to 10 hours per week, but the most active members likely exceed these hours – and they are the ones who reap proportional benefits from the experience. Recent graduates have pointed to their experience in the SSIF and GSIF as being a critical factor in getting interviews and succeeding in their interviews to get a job offer.
“Besides being an amazing résumé builder, students get real-world experience that is invaluable,” Marlo said. “By actually managing funds, students learn life skills in addition to building upon their business knowledge. They must remain strictly disciplined to adhere to the fund’s investment philosophy, regardless of stock market trends or personal beliefs. They learn how to work together and function effectively as a team, even when there are differing viewpoints. They further develop their public speaking by presenting in front of others, ranging from other SSIF/GSIF members to executive officers at multibillion-dollar corporations. The benefits from being part of SSIF/GSIF are tremendous.”
William Schefelbein, a junior studying management and marketing, participated in SSIF. He said he feels that SSIF helped jumpstart his career.
“SSIF has provided me with many opportunities, such as an internship with the SIU Foundation, where I have been given the opportunity to assist with the development and implementation of two brand-new alumni and donor initiatives for SIU,” Schefelbein said. “With my involvement with SSIF, I was asked to be a College of Business ambassador, which has allowed me to interact with both prospective students and alumni on a more personal basis. SSIF has provided me with friendships and relationships that extend beyond the trading room. I know that in the future I will have connections that will further my professional experience and will grow my professional base.”
Austin Miller, a freshman studying accounting, is participating in SSIF, and he shared his thoughts about his experience in SSIF.
“Originally, I was not sure if SSIF was right for me,” Miller said. “It is much different than what I expected it to be. However, the research that a member does on companies proves to be much more interesting than I originally thought. In SSIF, I have learned the difference between a good company and a good stock buy. SSIF teaches us how to evaluate stocks and forecast company performance, including what the factors that may influence their performance are.”
“The SSIF and GSIF programs offer students invaluable hands-on experience and added value to include in their resumes as the go out into the work force to pursue their careers,” said Bill Hartmann, chair of the SIU Foundation Investment Committee. “The Foundation Investment Committee is very proud to partner with the College of Business to provide these exceptional programs for the students.”
“Successful investing requires a sound strategy and much discipline,” Marlo said. “These students must adhere to a strict investment process that has generated solid long-term performance. The SSIF/GSIF does not invest for short-term performance. The group does not chase price trends or trade based on gut instincts. They control for risk as much as possible, and do not try to time the market or bet on one sector/stock to outperform.”
“This investment philosophy has paid off, and over the past 10 years the SSIF and its investment strategy has outperformed its benchmark, the S&P 400 Total Return Index. This is especially impressive when you realize that over 87 percent of actively managed (mid-cap) mutual fund managers fail to outperform their benchmark over a 10-year investment horizon. While we obviously hope that this performance continues, it is an impressive feat for current and former members none-the-less.”
If you have any questions or if you are interested in joining either the SSIF or GSIF, please contact Prof. Timothy Marlo at firstname.lastname@example.org or visit the SSIF and GSIF websites http://rso.business.siu.edu/ssif/ and http://rso.business.siu.edu/gsif/.