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Student Investment Fund

The Florida State University Student Investment Fund (SIF) is a real-world investment fund managed by Florida State undergraduate and graduate finance students. The fund was created in 2008 through private donations and generous investments from the Florida State Foundation. The fund started with $1.2 million, and now stands at more than $3 million. In 2013, the College of Business introduced a dedicated trading room that is used by the SIF student managers.

Frequently Asked Questions about the Fund

What is the objective of the Florida State Student Investment Fund?
The Student Investment Fund was created to train finance students how to actively manage an investment portfolio. Ideally, the SIF enriches student education through active participation in financial decision-making and financial markets.

What role do finance students have in managing the fund?
Students perform security research, pitch stocks, make buy/sell decisions and develop routine reports on fund performance. The student managers are fully responsible for the day-to-day management of the portfolio, thus gaining hands-on money management experience. They learn to deal with the uncertainty inherent in the process of estimating stock value and contrasting it to stock price. The process helps them develop their financial intuition and provides an arena for practical application of investment decisions.

What are the SIF’s benefits to Florida State finance students?
Managing the SIF provides students with real-world experience implementing investment selection and money management principles. Students are provided the opportunity to attain practical knowledge and experience that reaches far beyond typical coursework. Ultimately, the student fund managers acquire a deeper and more complex understanding of the concepts taught throughout their undergraduate and graduate finance studies.

What is the current portfolio composition? 
At the beginning of September 2014, Florida State’s SIF had assets under management of just over $3 million. Approximately 80 percent of the fund is equity investments, and the remainder is invested in fixed income securities or cash. These percentages often change, however, as the specific asset allocation at any given time is an active investment choice made by the fund’s student managers.

How can I take part in managing the Florida State Student Investment Fund?
The Student Investment Fund is managed by both undergraduate and graduate students depending on the semester. In the fall and spring, the fund is managed by students in the Masters of Science in Finance (MSF) program. During the summer, undergraduate students in an elective Student Investment Fund course take over the fund management duties.

The COB Student Investment Fund Investment Groups

Long-Term Investment Group
The objective of the Long-Term Investment Group is to buy securities that are believed to be currently mispriced and have positive future prospects and sell those that are thought to have negative future prospects. The group employs a discounted cash flow model developed and modified by its members to determine if the markets are under- or over-valuing a given asset. Investments suggested by this group are usually considered for longer holding periods.

Short-Term Investment Group
The Short-Term Investment Group focuses on near-term events and attempts to take advantage of mispriced securities brought about by investors’ irrational beliefs and trading patterns. Some examples of the techniques used are: Post-Earnings Announcement Drift, Momentum and Overreaction (as defined by Debondt & Thaler). This group is also assigned responsibility for derivatives trading the spring semester.

Arbitrage Group
The Arbitrage Group is primarily focused on identifying mispricing in the spread between two securities and arbitraging the difference. Mergers often provide these opportunities through remaining knowledgeable about recent announcements, news about regulation that may hinder the merger’s success, and the implied probability of deal failure captured by market pricing. Other investment opportunities include pairs trading, long/short sector allocation, industry and/or country over- or under-weighting, etc. The Arbitrage Group strives to maintain a small basket of several positions at a time in the hopes of benefitting from diversification.

Student Investment Fund Direct Support Organization (DSO) Board

The Student Investment Fund DSO Board was initiated in 2008 to provide support directly for Florida State University College of Business programs and initiatives. The initial purpose of the board is to advise and prompt the growth of the College of Business Student Investment Fund, a limited liability company that was created for the purpose of introducing and teaching students how to actively manage a portfolio. The board also is in place to facilitate and approve new student programs within the College of Business. The board meets semi-annually, and none of the board members have any conflict of interest.

Kirk T. Rostron 
Managing Partner
The Mt. Vernon Group, LLC 
William G. Smith Jr.
Chairman, President and CEO
Capital City Bank Group
Jerry Ganz 
Chief Financial Officer
Florida State University Foundation 
Ralph Alvarez
A.V.P, Finance and Administration
Florida State University
Dr. William A. Christiansen
Chair, Department of Finance
Florida State University   
Dr. Steven B. Perfect, CFA
Associate Professor of Finance
Florida State University

Trading Room

Trading room enhances students’ education with experience in real world of finance

The trading room at Florida State University’s College of Business is equipped with an 80-inch presentation display, three 55-inch financial data displays, Bloomberg terminals, an eight-zone world clock, 35 touchscreen computers and scrolling stock tickers. The goal of the trading room is to replicate those used by Wall Street investment firms.

The trading room is designed to give upper-level finance students hands-on experience in the real world of finance, training them in financial modeling and portfolio management - and giving them an edge in the competitive job market of Wall Street investing.

Since it was installed in 2013, the trading room has been a tremendous boon to students managing the university’s Student Investment Fund. Student managers are responsible for virtually all activities associated with the fund's portfolio (now valued at just over $3 million), including company research, economic forecasting, risk management, pitching stock and bond ideas, working with the fund's brokers to execute trades and producing written reports and verbal presentations to the fund's advisory committee.

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