Students receiving lecture from Mona Mahajan, U.S. Investment Strategist on macroeconomics

Investment Strategy

UCIMCO’s investment strategy involves three portfolios that provide students with different levels of experience opportunities to learn the art of investing.

New members to UCIMCO follow the value-driven strategy as described in Edgar Wachenheim’s Common Stocks and Common Sense.

New students learn a strategy in which they identify stocks that the market is likely undervaluing but have low bankruptcy risks.

  • Identify stocks with low price-to-earnings P/E ratios relative to similar stocks.
  • Among the stocks identified, identify those issued by firms with low risk of bankruptcy
  • Among the stocks identified, identify those that could generate rapid earnings growth of one or two factors change.

Experienced stock-selection members use a growth-driven strategy as described by Michael Moe in his book, Finding the Next Starbucks, where they:

  • Examine mega-trends across the economy
  • Identify stocks that have the potential for high growth in the near future.

Advanced students manage an endowment style portfolio following the principles used by leading college endowment managers.

The Endowment Team consists of a small group of experienced undergraduate investors that invest across asset classes in order to reap the benefits of diversification. The Endowment team uses David Swensen’s Pioneering Portfolio Management as a guide for investing.

Our Portfolio’s Allocations and Performances

Since inception in November 2016, the Smith Fund has raised roughly $57,000 in contributions and generated roughly $12,000 in investment returns, bringing total assets under management to about $69,000. The fund is split into an endowment-style fund (about $55,000) and a stock-selection fund ($14,000). The split enables students with varying experience in finance to learn new things about investment management. The endowment-style fund invests in six exchange-traded funds representing a broad swath of the equity, bond, and real estate markets. The stock-selection fund invests in three to six common stocks.