Student-Managed Investment Funds: Cultivating Financial Expertise and Shaping Future Leaders

Student-Managed Investment Funds (SMIFs) are transforming higher education by offering students invaluable real-world experience in investment management. These funds, where students actively manage real capital, provide a unique platform for developing financial analysis skills, making informed investment decisions, and preparing for careers in the financial services industry.

The Rise of Student-Managed Investment Funds

The concept of student-run investment funds dates back to 1946, when World War II veterans donated $3,000 to Lafayette College to establish a campus-based investing club. Over the past few decades, other colleges and universities have followed Lafayette College’s lead. The vast majority were founded in the early to mid-2000s. Today, SMIFs are becoming increasingly prevalent, with many institutions recognizing the educational and career benefits they offer. Many of these newer funds, now commonly referred to student-run endowments or Student-Managed Investment Funds (SMIFs), have much more formal structures and relationships with their campuses. Many also include formal guidance from a university dean, faculty member, or other professionals; and many also offer academic credit for student participants. It is likely that the number of schools offering these investment vehicles will continue to grow.

Structure and Functionality of SMIFs

As the name implies, SMIFs are pools of funds that college students can use to research and invest in stocks, bonds, or other financial assets. Students make the decisions on which assets to buy or sell-either on their own or with the assistance of faculty advisors or volunteers from investment firms. The funds are usually provided by donors, although some institutions have provided the funds through carve-outs from their endowments or other assets. While students are involved in the investment decisions, technically and legally, SMIFs are owned by the sponsoring universities. As such, any gains generated by SMIFs must be used to benefit the sponsoring university, not the individual student investors. They are housed in and supported by a campus academic department, such the school of business. SMIFs tend to be relatively small. Many hold between 10-30 securities and have a total value ranging from a few thousand dollars to several million.

Benefits for Students and Institutions

SMIFs offer a multitude of benefits for both students and the institutions that host them.

Educational and Career Opportunities

The primary benefit is the educational and career opportunities they provide to students. For instance, students involved with the University of South Florida’s (USF) Student-Managed Investment Fund learn modeling and other strategies needed to become investment research and stock analysts. “The skills and contacts these student participants develop open a lot of career doors,” says Ken Souza, senior director of investments at the University of South Florida Foundation. “The students in the program over the last 12 years have achieved outstanding professional success.

Diversity and Inclusion

Student endowments also give institutions opportunities to recruit and retain a diverse set of students. The University of South Alabama’s Jaguars Investment Fund (JIF), started in 2015 with an initial gift of $250,000 and valued at $750,000 as of early 2022, has allowed the university’s Mitchell College of Business to “increase student diversity within the program,” according to Chris Lawrey, assistant professor of economics, finance, and real estate and director of the JIF. USF has had a similar experience with its student-managed fund, according to Souza. “There are students from nearly every continent who have enrolled in the program and managed the assets in the SMIF,” Souza says.

Socially Responsible Investing

Some schools may have adopted SMIFs as a response to students’ calls to gain more experience in investing in socially responsible investment strategies. Data from IEN show that at least 10 percent of student-run endowments have one or more sustainable investing mandates, including environmental, social, and governance (ESG) integration; impact investing; negative and positive screening; and shareholder engagement. “SMIFs are a great investment in students’ education and their future,” says Nicole Torrico, program director for IEN.

Performance of SMIFs

For the past two years, NACUBO and TIAA, through the annual NACUBO-TIAA Study of Endowments (NTSE), have collected summary data on student-run endowments. Of the 720 colleges and universities that participated in the FY21 survey, 225 (about 31 percent) said they had at least one student-run endowment fund. Collectively, these SMIFs held approximately $521 million in assets. But the presence of a student-run endowment varies greatly when total endowment market value of NTSE participants is considered. About 43 percent of the campuses with over $1 billion in total endowments had student-run funds, compared with only 10 percent of the schools with less than $25 million total. And among schools with SMIFs, on average the largest-endowed schools had about $3.8 million in student funds, compared with $80,000 for schools with endowments below $25 million. “Most of the schools that have SMIFs are already well resourced,” says Torrico. SMIFs tended to do very well in FY21 in nearly all endowment size categories. During the year, on average, the student endowments returned 34.9 percent, compared with 30.6 percent for all institutional participants in the NTSE.

For example, for the second time in three years, UMass Dartmouth's Student-Managed Investment Fund (SMIF) claimed first place in the annual UMass System investment competition, earning top honors for 2025 with a 20.44% return on its portfolio.

Factors Affecting Performance

The performance of SMIFs can be influenced by various factors, including market conditions and the structure of the fund.

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Market Volatility

Like all investments, SMIFs are subject to market volatility. For example, the stock market, as measured by the Standard and Poor’s 500 Index®, returning -20.6 percent in the first six months of calendar year 2022.

Fund Structure

The structure of SMIFs may continue to adversely affect their near-term performance. “With the market down now, we can’t liquidate our student funds or make any other changes, even if we wanted to, because the students have to make those decisions,” Lawrey says.

However, like all endowed funds, it is important to recognize that student-managed investments are often designed to last into perpetuity, and short-term declines should not be the sole basis for making changes in long-term investment philosophies.

Establishing a Student-Managed Investment Fund

Given the benefits of SMIFs, more colleges and universities are exploring the possibility of establishing these funds. Opportunities exist for more schools to adopt or expand these opportunities for current and future generations. What are the best ways for interested campuses to start these funds? Given the broad range of possibilities, it is important to note that no SMIF structure is “right,” as it often depends on each college or university’s context and student interests.

Key Steps for Implementation

The most important step, besides acquiring a source of funds, is to get involvement from senior institutional leadership. “You have to get buy-in from a dean or other senior leader,” says Albano from the University of South Alabama.

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Securing Leadership Support

Senior leaders can, for instance, tie a SMIF to university goals and mandates, especially those related to student recruitment, sustainable investments, and other campus-wide initiatives. Senior leaders also can provide a pathway for students to earn academic credit for their efforts, especially if the student-run endowment can be run through a business school or related program.

Engaging Local Businesses

Campus leaders also can help by involving local businesses. “Members of the local finance and investment community can be a source for student advisors, internships, and mentoring opportunities, USF Foundation’s Souza says.

Promoting Diversity and Inclusion

The establishment of student-run funds also could be a way for higher education to help address issues of diversity, equity, and inclusion in the financial services sector. “People of color are significantly underrepresented in the investment management industry,” Torrico says.

Involving Faculty and Staff

Albano adds that campus leadership can convince faculty to become involved, particularly if the school’s goal is to use the student-run endowment as an additional educational tool for students. “Everything should be created around what is best for the students,” Albano says. Souza and Albano both stress the need to involve campus infrastructure personnel, who will need to be involved with establishing the student funds, managing daily operations (especially when students are not enrolled), and other tasks. “Take advantage of what a foundation or investment office can offer-especially in areas of cultivating donors, providing custody of the assets, audit, and other matters that students likely will not have expertise in,” Souza says. “We are happy to help the students and the university to be successful in this endeavor.”

Washington and Lee University's Williams Investment Society

One notable example of a successful SMIF is the Williams Investment Society (WIS) at Washington and Lee University (W&L). The Williams Investment Society’s $25.5 million assets under management rank sixth nationally according to a survey conducted by the Center for Investment Research. The recently released ranking tracked total assets under management (AUM) for colleges and universities as of Dec. 31, 2024. “This ranking is a testament to the excellence, dedication and accountability of our students,” said Aliaa Bassiouny, professor of finance and the faculty adviser to the Williams Investment Society. “WIS is entirely student-run, and they vote on the society’s holdings. “It is an incredible point of pride for the Williams Investment Society to be ranked sixth in the nation, especially coming from a school with less than a quarter of the population of the next smallest school in the top 10,” said Preston Childress ’26, executive director of the WIS. “This remarkable success is a testament to the 25-plus years of enthusiasm, dedication and hard work of countless WIS members. Established in 1998, the Williams Investment Society is a student organization that manages a portion of W&L’s endowment in equity securities. The fund’s purpose is to provide students with a forum to develop their interest in investments and financial analysis by allowing them to actively manage real capital. The WIS portfolio includes investments in firms with a market capitalization of at least $500 million and a $5 minimum share price.

Hofstra University SMIF

Since the Hofstra SMIF began operations in the fall 2016 semester its equity returns through January 15, 2020 have been 52.07% versus the Russell 3000 of 47.85% and benchmark S&P 500 returns of 50.69%. The current SMIF equity portfolio has a beta of 0.77. The average equity portfolio beta since inception is 0.86. Some notable current holdings of the SMIF equity portfolio are listed below. Service Corp. *Individual returns include dividends and are benchmarked against the S&P 500 returns over the same holding period. The following were the original analysts who initiated recommendations for the following current positions: Nicholas Biasi (Target), Simone Sanvito (Alphabet), Dishant Patel, Hammad Imran, Kamal Pankhi (Intuitive Surgical) and Gabi Manning, Alan Chin, Kin Lam (Service Corp. The Hofstra SMIF analysts would also like to thank the SMIF Supervisory Board for their work. The Supervisory Board is comprised of Trustee Frank G. Zarb, Professor and Vice Dean K.G. Viswanathan, Professor Ahmet Karagozoglu, Professor Ron Frank, and Chairperson of the Board and Dean of the Zarb Business School Janet Lenaghan. The SMIF analysts are also grateful for the support and guidance provided by Hofstra Treasurer Catherine Hennessy.

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