The UC Foundation agreed three years ago to turn over a portion of its endowment fund for finance students at the University of Tennessee at Chattanooga to invest to help both diversity its fund management and give students some real-life fund management experience.
The move has not only earned better than a 9 percent annual return on the initial $250,000 investment; the Student Managed Investment Learning Experience (SMILE) also has helped prepare students for an international competition that earned UTC global attention as a finalist university in the competition among more than 1,000 college and university teams from around the globe.
UTC's five-member team from the SMILE fund finished this spring among the top schools in North America — and the only all undergraduate team among the finalists — during the Chartered Financial Analyst Investment Research Challenge finals in Boston.
The competition matches college students from across the world against each other, competing in their analysis and research into a specific company.
In Tennessee, each school was asked this year to analyze Delek Logistics Partners (DKL), Brentwood, Tenn.,-based logistics and marketing company for crude oil and refined products. At the state competition in February, the UTC SMILE team recommended investors sell the DKL stock, which proved to be the right choice since Delek Logistics' shares dropped by 15 percent from the end of January until the end of March when the national competition was held.
In the CFA Challenge, each team creates a report with a buy, sell or hold recommendation, then presents and defends its choice to a panel of industry professionals and is judged on their analysis and presentation.
UTC SMILE team has steadily gotten better over the past three years in the CFA annual competition, rising from the No. 2 team in Tennessee three years ago, to a regional winner last year to a finalist among thousands of colleges competing with teams this year.
"It's really phenomenal how quickly we've ascended up the ladder of recognition, and I think that is a real testament to how hard our students care about this competition and the skills they are developing here at UTC," said Dr. Hunter M. Holzhauer, a UC Foundation assistant professor of finance and team advisor.
In this year's Americas Regional finals, the UTC team faced Jacksonville University, Marquette University, Universidad del Pacifico, and Tufts University. Jacksonville University won the finals and began competing Friday in the global finals in Kuala Lumpur, Malaysia.
"It was truly a team effort to make it as far as we did," said team member Shane Cortiss. "It helps us students see how much we can learn when applying everything from our classes and the SMILE Fund."
More than 5,000 students representing over 1,000 teams from universities in more than 80 countries took part in the 2018 CFA competition. In the Americas Regional, 440 universities competed with 54 making it to the semifinals.