Cal Poly Pomona’s Bronco Asset Management team won first place in the 2021 Student Managed Investment Fund Competition, organized by the Chartered Financial Analyst Society, Orange County (CFAOC) chapter.
With the win, the team will manage an investment portfolio of $75,000 for the organization, in addition to their Cal Poly Pomona Student-Managed Investment Fund (SMIF). Together the portfolios total approximately $320,000.
The competition began this fall with the organization’s request for proposals for investment management services.
Students were required to submit a written proposal (investment thesis) delineating investment philosophy and process, economic outlook, market overview, asset allocation, fixed income and equity valuation, and selection, portfolio construction, monitoring and risk management processes, and more. Each team also made a presentation, followed by a Q&A with a panel of five industry judges.
“Our biggest challenge was what was happening in the world,” said Allegra Roza, a senior majoring in finance, real estate and law (FRL). “We would talk about COVID or the presidential debate, and it would go on for hours. It was an endless process of ideas and feedback. It was a big challenge to consider COVID, and how we would accommodate the pandemic in setting up our portfolio… It definitely impacted our decisions regarding equities.”
Ultimately, the Bronco team proposed a portfolio of 35 securities, covering all sectors of the equities market and fixed income market. Each security was supported by in-depth research and an analyst report with supporting logic and valuations.
One of the most debated decisions was how much to invest in China, said Andrew Brands, a sophomore FRL major.
“Because China combatted the coronavirus so well…They were able to jumpstart their economy very quickly. There were a lot of arguments and aha moments. About 15 percent of our entire portfolio is dedicated to China and China-related economies. It was unnerving for people. There’s not a lot of transparency coming out of China, but they are a huge global player. It looks kind of risky but if you dig deeper, it’s actually the right thing to do. It’s one way that the pandemic is really reflected in our investment strategy,” said Brands.
Bryan Aciniega, a senior majoring in computer science, noted the team’s long-term outlook and fundamental investment strategy, which relied on their own research. “If you just looked at the headlines, they were saying that it was a very risky market to get into and to be conservative, to go 60/40 (equities to fixed income) and play it safe. We decided to go 80/20 because interest rates are really low which would hinder any fixed income returns.”
The vast majority of the team’s research was done through the industry-standard Bloomberg Terminals platform. While access is usually provided through the Dr. J. Douglas Ramsey Financial Markets Lab at the College of Business Administration, the finance, real estate and law department was able to provide remote access to the Bloomberg platform soon after the university moved to virtual instruction.
“Having access to the Bloomberg terminals was pivotal,” said Roza. We really needed them for specific data, accurate numbers and historical trend research.”
The students will execute their portfolio during December and manage the fund through the performance period of Jan. 1 to Dec. 31, 2021.
The team members, who are also part of the Cal Poly Pomona Student Managed Investment Club (SMIC), are:
- Damian Anderson – FRL Mitchell Johnson – FRL
- Connor Morgan – FRL Sean McDonough – MHR
- Wendy Sujarit – FRL Adam Escamilla – FRL
- Allegra Roza – FRL Brandon Castillo – FRL
- Yuan Yong – FRL Ellie Enrique – FRL
- Clayton Kusayanagi – FRL Andrew Brands – FRL
- Ethan Tecson – FRL Sandra Gutierrez – TOM
- Nirvar Khunkhuna –FRL Akashdeep Takhar – Computer Engineering
- Samuel Chong – FRL Alexander Saikali – FRL
- Feiyu Han – FRL Monica Alvarez – FRL
- Noah Mendoza – FRL Bryan Arciniega – Computer Engineering
- Colin LeFrancois – FRL Andrew Seielstad – FRL
- Jennifer Johnson – FRL Zachary Winkle – FRL
- Jon Oliver – FRL Joseph Baierl – FRL and Accounting
This is the second consecutive first-place win for the team since the SMIF program was founded in fall 2017. The Broncos finished second in their first event and third the following year.
Among the keys to their success are a dedicated team of alumni and faculty willing to jump on calls to answer questions, easy access to the Bloomberg terminals, and the Student Managed Investment Fund club, which provided early workshops on a range of financial topics.
In this year’s event, Cal State Long Beach took second, CSU Fullerton third and Chapman University fourth. Also competing were UC Irvine and UC Riverside.
Professor Pawan Tomkoria is the Student-Managed Investment Fund (SMIF) class instructor and program co-advisor with Professor Alex Wei Wu.
“We model this program as an internship opportunity in investment management, where students develop their own strategies, make their own decisions and then execute their decisions using a substantial amount of real money,” said Tomkoria.
Cal Poly Pomona’s SMIF program, offered through the FRL department, gives students an opportunity for experiential learning in security analysis and portfolio management. The program began with an approximately $200,000 investment under a Cal Poly Pomona alumnus’ personal portfolio.
“Since its inception, the SMIF program has not only brought in financial returns, but more importantly, educational returns,” said Wei Yu, chair of the FRL department. “This consecutive first-place win is a testament to our students’ dedication and drive for excellence, our faculty’s commitment to Cal Poly Pomona’s mission of ‘cultivate success through a diverse culture of experiential learning, discovery, and innovation.’
Students and alumni from the SMIF program have been given internship and career opportunities at companies such as Goldman Sachs, PIMCO, RBC Capital, and UBS. Endorsed by the CFA Institute as a University Affiliation Program, the FRL department strives to bring more real-world experience into the classroom and align curriculum with industry needs.”