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Dillon Martin

Dillon Martin is finishing his undergraduate degree in finance at the University of Tennessee at Chattanooga with plans to graduate in May.

But the UTC senior calls his academic studies his part-time and weekend job since he spends most of his time these days "working" on another, more daunting task at UTC. Martin is leading a 27-student team trying to maximize the stock market returns on a portion of the assets held by the University of Chattanooga Foundation.

Martin is the president and chief investment strategist for the UTC SMILE (Student Managed Investment Learning Experience) fund, an investment program managed by undergraduates that helps students gain real, first-hand experience with making investment decisions in the market.

"This has really taken priority over my classes right now," Martin said. "During the week, it's all Smile Fund, and on the weekend I just have to catch up on class work."

The fund has 20 analysts who research stock options for the fund and six officers who make the ultimate decision, subject to final approval from the faculty advisor (Dr. Hunter Holzhauer) and the head of the UC Foundation (Dr. Bryan Rowland). The students are not paid for their investment work, but they do earn one credit hour for each semester they participate in the SMILE Fund and gain valuable, marketing experience for future employment.

Rowland, UTC's vice chancellor for development and alumni affairs and executive director of the UC Foundation, said the SMILE Fund began managing $250,000 of the foundation's $118 million endowment in July 2015.

"We had a little heartburn right at the beginning when the market turned down and the returns were negative because we take very seriously being good stewards of our donors' contributions," Rowland said. "As their clients, we grilled the students pretty hard about their investments and used that as a real learning experience.

This year, the SMILE fund has actually done better than our other investments (up 4.448 percent since Jan. 1) and has given some tremendous real-life experience in investments and money management for our students."

In the first 18 months, a dozen student participants in the SMILE fund landed internships or jobs with finance or investment firms, and some of those companies have decided to contribute to UTC as a result, Rowland said.

"Our students can tell prospective employers they have not only studied finance and investments, they have helped manage real-life funds for a real client," he said. "In the years to come, I expect this will become one of the most desirable student organizations on campus, and the assets these students manage should continue to grow."

Under the direction of Dean Robert Dooley, the UTC business school is also working with the UC Foundation to develop a venture fund to invest in student-led business startups, both to help diversify and maximize investment returns for the foundation and to support new businesses by UTC students and graduates.

The SMILE fund holds investments in 35 publicly traded stocks, and the goal is to hold them for two to three years. Initially, picking those stocks proved to be a challenge in late 2015 and early this year.

"When we entered the market we had a tough run when China devalued its currency and the energy markets fell, so we had to dig out of a bit of a hole we got in at the end of 2015 and in early 2016," Martin said. "All managers had a kind of a tough time at the end of 2015, but fortunately 2016 has given us a chance to right things up."

Going into this month's presidential election, the SMILE participants, like most investors, anticipated a win by Democrat Hillary Clinton. But the group also put some money into businesses that might profit from a Trump victory, which ended up helping the fund to grow along with the Trump rally that followed the election and an initial overnight sell-off in many markets.

"It would have been nice to be more aggressive if we had known that Trump would win because there has been quite an unexpected bull rush since the election," Martin said. "But I'm still very happy with how we were positioned because we really rode through that quite nicely."

Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.

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