SEMI-ANNUAL REPORT – October 7, 2010

SEMI-ANNUAL REPORT – March 10, 2016

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TABLE OF CONTENTS

I. Executive Summary .............................................................................................................. 3

II. Overview of the Fund ........................................................................................................... 3

III. Historical Performance ......................................................................................................... 5

IV. The Economy ........................................................................................................................ 6

V. Portfolio Strategy .................................................................................................................. 16

VI. Portfolio Summary................................................................................................................ 19

VII. Portfolio Performance .......................................................................................................... 23

VIII. Portfolio Risk ........................................................................................................................ 31

IX. RISE, GAME, Engage and Global IRC ............................................................................... 36

X. Spring 2016 Analyst Profiles ................................................................................................ 42

XI. Acknowledgements ............................................................................................................... 44

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I. Executive Summary

The Student Managed Investment Fund (SMIF) is honored that you have decided to attend our Spring 2016

Semi-Annual Presentation, for the period June 30, 2015 to December 31, 2016. SMIF is proud to offer a

unique hands-on learning experience for students attending the University of North Dakota (UND). Today,

we will discuss the strategy, goals, and performance of SMIF. Our investment strategy begins with a top-

down approach. In other words, prior to examining individual market sectors or companies, we look at the

direction the economy is headed as a whole. Looking forward to the next six months, we maintain a

relatively bearish outlook on the markets. The continued drop in oil prices stemming from an immense

oversupply, mixed with poor economic conditions in China have led to a turbulent market. Despite this

outlook, through active management of our fund, we believe modest gains can be realized. From an

economic standpoint, the Federal Reserve announced the plan to raise interest rates for the first time in

nearly a decade. This shows confidence in the U.S. economy as a whole, specifically in fields such as

housing and employment. However, the negative effects of a strong U.S. dollar have created a sense of

polarity in the economy, which is cause for concern. Because of these reasons, we will be trading our

heavier weighted sectors towards the end of the semester in order to make the best investment decisions

before we enter the summer months. We currently have four separate portfolios. The Stenehjem balanced

portfolio – comprised of equities, fixed income, and cash – is benchmarked against the SPY and the GVI.

The Seifert/Foley – an all equity portfolio – is benchmarked against the SPY. The Foley/Stenehjem bond

fund is benchmarked against the GVI. Our fourth and final portfolio is also our newest. The Larson Fusion

Fund – an alternative investment portfolio – is benchmarked against the previous year’s returns. During

the second half of 2015, our Seifert/Foley and Stenehjem balanced funds returned -6.69% and -6.36%

respectively. This compares the S&P 500’s return of -0.98%.

II. Overview of the Fund

Beginning in the fall of 2005, the College of Business and Public Administration (COBPA) at the University

of North Dakota joined a growing number of business schools by providing students the opportunity to

manage and administer an investment portfolio. The COBPA believes strongly in experiential learning.

Through this program, students receive hands-on experience in the field of finance by allowing them to

actually manage a portfolio instead of performing simulations. Students work in small groups conducting

research and analysis, and they present formal investment recommendations to the Investment Advisory

Committee, comprised of faculty and student fund managers. Students are responsible for managing all

aspects of the Investment Fund: research, investment management, fund administration, and client services.

The student managed investment portfolio has been funded with $950,000 from the UND Alumni

Foundation. The funds were initially divided into two portfolios. The Seifert/Foley Fund, which is entirely

comprised of equity securities, began with $100,000 in the fall of 2005. In the fall of 2007, the students

were honored to receive an additional $100,000 donation from the UND Alumni Foundation. In 2009,

another generous donation of $100,000 was given to bring the fund to $300,000. The Foley Bond Fund was

also started after several generous donations from Mr. Robert Foley. The Stenehjem Fund began in the

spring of 2006 with a $500,000 donation. The Stenehjem fund is now split into one Stenehjem Balanced

portfolio and one Stenehjem bond portfolio. In December of 2012, SMIF had the opportunity to re-classify

the Stenehjem equity fund into a balanced fund which is comprised of both equities and fixed income

securities. Currently the Stenehjem Balanced Fund is allocated to approximately 72% equity investments,

20% fixed income investments and 8% cash holdings. We are also happy to introduce a new fund, the

Larson Fusion Fund. This fund is the result of a generous donation made by the Edson and Margaret Larson

Foundation. Overall, SMIF is managing one equity portfolio, one mixed portfolio and two bond funds with

total holdings of just over $1.2 million dollars.

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In the fall of 2006, Dr. Steven Dennis took over the Student Managed Investment Fund (SMIF). During his

tenure, SMIF has spent considerable time carefully restructuring and redesigning a program that can help

students experience life as security analysts and portfolio managers. Students must apply for SMIF, and the

Faculty Advisor Board selects students for the fund. Course requirements include asset allocation decisions,

preparing and presenting security research reports, implementing investment decisions, monitoring

portfolio performance, complying with investment guidelines, making decisions regarding portfolio

adjustments, record keeping, portfolio performance evaluations, and making presentations to faculty and/or

clients. The A. Kirk Lanterman Investment Center is the key component in effectively implementing all

activities required in the management of the fund. The restructure during Dr. Dennis’ tenure has led to

increased student interest, increased enrollment, and greater returns on SMIF investments. Starting in the

spring of 2008, the students were able to use investment returns to fund educational activities. This provides

the funds for attendance at the ENGAGE International Investment Education Symposium in Chicago and

the G.A.M.E (Global Asset Management Education) forum in New York City, both of which will be

discussed during our formal presentation.

The Spring 2016 semester saw the return of Dr. William Smith as the faculty advisor to the Student

Managed Investment Fund. Dr. Smith brings his vast experience from the Finance Department to the fund,

especially assisting in the growth of our first semester students through his advising. Since the winter of

2014, SMIF has been in the process of transferring brokerage and administrative accounts to Charles

Schwab Corp. This process has now been completed, and the fund is very satisfied with the services

provided by our new broker.

Currently there are 31 students enrolled in SMIF for the Spring 2016 semester. We continue to be very

pleased with the level of commitment shown by students towards the fund. Within the first few meetings

of every semester, a Lead Sector Analyst is chosen for each sector based on investment experience. New

students are allowed to choose the sector in which they wish to participate, with an overall goal of balance

among the sectors. The fund also has six Senior Officers (President, Vice President of Finance, Vice

President of Operations, Vice President of Fixed Income and Alternative Investments, Chief Risk Officer,

and Chief Economist) who are appointed by the faculty advisor, based on investment experience. The

benefits of being a member of the Student Managed Investment Fund are enormous. In addition to

improving quantitative and qualitative research skills, the members of SMIF gain networking and

presentation skills that are crucial to any career advancements.

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Student Managed Investment Fund Organizational Structure

III. Historical Performance

Year Balanced Fund SMIF Equity S&P 500 Balanced

Index

2007 NA 8.30% 5.50% NA

2008 NA -42.10% -36.80% NA

2009 NA 42.30% 26.40% NA

2010 NA 14.62% 14.59% NA

2011 NA -1.06% 1.89% NA

2012 NA 10.54% 15.99% NA

2013 17.62% 30.25% 32.31% 14.16%

2014 4.03% 4.52% 13.46% 8.11%

2015 -3.95% -3.17% -0.37% -0.43%

YTD -7.05% -9.09% -5.82% -2.14%

President

VP - Finance

Lead Sector Analysts

Junior Analysts

Chief Risk Officer

Chief Risk Officer

Chief Economist

Junior Economist

VP - Operations

AVP -Operations

VP - Fixed Income and Alternative

Investments

AVP - Fixed Income

AVP - Alternative Investments

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As you can see from the table above, SMIF has outperformed the market (S&P 500) during three out of our

nine years as a fund (the period in which we have historical data). Despite the fact that our YTD returns are

trailing the S&P 500, through our active management of the fund, we remain optimistic looking at the

months ahead.

This reflects a $10,000 investment in SMIF equities portfolios versus the S&P 500. Bonds in the Stenehjem

Balanced portfolio have been taken out of these return calculations.

Chart Data

Our performance against the S&P 500 can graphically been seen in the table above. SMIF Equity has

outperformed the market three out of nine full years. Oil prices have remained low ever since the commodity

prices dove in late 2014. Considering the volatile times that the stock market has experienced during the

financial crisis and the recent recession, we are reviewing our downside risk to consumer discretionary and

technology sectors.

IV. The Economy

China has continued to be one of the main factors influencing the economy’s volatility in the second half

of 2015 and beginning of 2016. Investors had been allocating much of their capital towards Chinese

markets, and at this time, the overall economy was not performing well. Eventually the Chinese market

bubble popped and prices went tumbling, not only in China, but in US markets as well. While the prices

in china have been falling, Chinas’ government has been trying to increase fiscal stimulus to both shore

up short-term growth and defend against deflationary pressures. Along with China, another main factor

that has been influencing the economy lately are oil prices. Oil prices have continued to drop to around

$30/barrel. There has been recent good news regarding talks about an oil production ceiling which has

helped settle the oil prices. But Iran still wants to raise production to recapture the market share it lost

$-

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2007 2008 2009 2010 2011 2012 2013 2014 2015

Fund Performance vs. S&P 500

S&P 500 SMIF Equity

VPF%20Semi%20Annual%20Chart.xlsx

VPF%20Semi%20Annual%20Chart.xlsx

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during years of sanctions, which makes it hard to see the oil prices rise in the near future. Manufacturing

in the United States has remained stable, but exports dwindled due to the relatively high strength of the

dollar caused by low inflation. This strong US dollar has maintained high for the end of 2015 through the

beginning of 2016 and is continuing to hurt exports. Because of low inflation and economic growth that

is still crawling its way out of recovery, the Federal Reserve has held off raising its Federal Funds Rate

until late December when the Federal Reserve said they are going to raise the rate from a range of 0% to

0.25% to a range of 0.25% to 0.5%. This move was widely expected and is a sign of how much the

economy has healed since 2008.

The third quarter of 2015 saw the Gross Domestic Product (GDP) post a 2% growth rate which is slightly

down from the last quarter of 2.8%, but is still a decent amount higher than the second quarter which

came in at 0.6%. For the fourth quarter of 2015, the GDP came in at 0.7%, which comes in near the

bottom of the consensus range. Some of the reasons for this is due to weaker foreign markets as net

exports fell and also the reduction in inventory investment as inventories are currently rising. There are

definitely points of concern, especially the weakness in exports and business investment, but it's the

resilience in the consumer that should help confirm faith in the strength of the economy.

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One of the biggest indicators that economists use to gauge the current strength of the economy is the labor

market. Employment forms the backbone of our consumer society because every job provides the income

used to support Americans’ consumption of goods and services. Two data sets that are used by investors

like SMIF to evaluate the state of the labor market are initial jobless claims and continued jobless claims.

Both are reported weekly, but continued claims statistics are reported on a one-week lag to initial claims.

Initial claims show the number of claims filing for unemployment insurance for the first time. Although

these claims fluctuate greatly from week to week, a 4-week moving average, as shown above, is

commonly used to smooth the line out. For the most part, initial claims have followed a steady downward

trend, although the past few months have shown a slight increase. Initial jobless claims have followed a

downward trend for most of the last year, and were close to historic lows but have had an upward trend

recently. Continued claims also followed a downward trend, although they started to increase near the

end of June to begin to distance themselves from historic lows but the gap has been recently closing due

to the rise in initial claims. Falling initial jobless claims and continued claims has led to a marginal

decrease in the unemployment rate, which began 2015 at 5.7% and is currently at 4.9%. These numbers

show that many of the previously discouraged members of the workforce are starting to regain confidence

and are finding work.

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In addition to watching jobless claims on a weekly basis we also pay close attention to the monthly

employment situation report, specifically the monthly change in non-farm payrolls. The total nonfarm

payroll is made up of approximately 80% of the workforce who contribute to the GDP. Workers included

in this statistic represent all businesses except for private households, government, farm, and nonprofit

employees. While month-to-month statistics tend to be extremely variable, seasonally adjusted

calculations give a much clearer picture of where employment is heading. The average total nonfarm

payroll has stayed pretty flat right around 200,000 showing a pretty steady trend currently.

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Another strong indicator of a prospering economy is positive manufacturing numbers. There are a variety

of reports used to evaluate the manufacturing situation, including the ISM Manufacturing Index, durable

goods orders, capacity utilization, and the industrial production index. The ISM Manufacturing Index is

constructed so that levels of 50 or higher indicate a growth in the manufacturing sector. Less than 50

signifies a contraction in manufacturing, although the U.S. economy is still considered growing at levels

of 43 and greater. Manufacturing got off to a bad start in 2015 primarily due to low amounts of exports,

which can be attributed to the strength of the US Dollar. It had a slight rise in May but then proceeded to

continue to fall to a low of 48. The latest report showed a slight rise to 48.2 but looking forward in 2016

we probably won’t see much increase due to the continuing low exports and the strength of the US Dollar.

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Capacity utilization is the level at which a country or business uses their plants to produce goods or

services. As shown above, capacity utilization for the manufacturing sector is still working to get back to

pre-recession levels. Capacity utilization has shown a slight decline this year but the jumped back up to

77.1 this last month.

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While not quite as cyclical as manufacturing, housing is a huge sector of our economy that investors pay

attention to, especially because it was the underlying origin of the financial crisis in 2008. In the Student

Managed Investment Fund, we pay attention to several indicators for housing, especially new home sales

and existing home sales. These two data sets provide a gauge for economic momentum. The reasoning

behind this is that the resources consumers have to expend to buy a house usually requires them to have

sufficient confidence in not only markets, but the economy as a whole. A rise in home sales therefore can

be counted as an unofficial increase in consumer sentiment. There was a recent decline in existing and

new home sales in November. This low supply is a plus for prices as the median is up 1.9 percent in the

month to $224,100 a 7.6 percent year-on-year gain. But in December the Existing home sales bounced

back to the top of the forecast at 5.46 Million compared to Novembers 4.76 Million. The new home sales

also had a good jump in December from 490,000 to 544,000, as it also beat the forecast. Looking forward

we look to see both existing and new home sales to continue this uptrend throughout 2016.

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The months' supply is the ratio of houses for sale to houses sold. This provides an indication of the size of

the for sale inventory in relation to the number of houses currently being sold. The months' supply

indicates how long the current for sale inventory would last given the current sales rate if no additional

new houses were built. As shown above, the overall monthly supply of homes has stayed fairly low.

There has been a recent increase from around 5 to 5.9 in september. It declined to 5.2 in december but

still is up from the befining of 2005. When the housing supply is low, customers in the market may have

some trouble finding what they are looking for.

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The University of Michigan Consumer Sentiment survey is a survey of 500 households in the United

States who are asked questions on their views of the economy and financial conditions. The consumer

sentiment index levels started the year off very strong at a level of 98.1, which shows that consumers have

a good feeling about the economy. But fell to 87.2 in September, which is still a good level. Recently it

has risen to back above 90 and looks to stay above that level as the consumer confidence measures have

yet to pick up much concern over declines in stocks and volatility in the global markets.

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The data taken for the CPI (Consumer Price Index) and PPI (Produce Price Index) is an aggregate of

prices for a typical basket of goods, excluding food and energy. As you can see the have stayed pretty

level throughout the past two years. Overall, lower inflation typically boosts equity markets because

people are willing to allocate their money where they feel they will be able to attain a higher rate of

return, and when interest rates are low, the bond market does not usually carry that same kind of appeal.

But due to the current oil prices and volatility in the global markets, equities have been taking a hit.

Looking forward into 2016, we will continue to monitor the Federal Reserve to see if there continues to

be interest rate hikes in this volatile economy. Other than rising the interest rate, the Federal Reserve

could put a pause on the hikes till the economy stables a little or even drop to negative interest rates due

to the recent news of Janet Yellen saying she wouldn't take negative interest rates off the table. Other

global events that we will be keeping an eye on will be the any upcoming OPEC meeting, whether it is an

emergency meeting of the scheduled meeting on the 2nd of June, to see if there is growing support on the

oil production ceiling or even a production cut. We will also continue to keep an eye on China and their

economy because it’s been such a big factor on the US equity prices. So far, the second half of 2015 and

beginning of 2016 has been up a little but down by a greater amount. We have seen markets rise and fall

and have continued to watch our economy move slowly ahead in recovery mode besides outside factors

such as oil prices and China. As for the rest of the year, we expect much of the same behavior. Housing

will hopefully continue to grow, and we would like to see manufacturing levels increase along with our

level of exports. If the global economy stabilizes, the US dollar strength drops, and oil prices increase we

can be confident that our economy is moving in the right direction.

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V. Portfolio Strategy

Investment Philosophy

The overall investment strategy of the Student Managed Investment Fund is based on a top-down approach

to stock selection. Under this philosophy, we start by analyzing the macro economy. Based on this research,

we then try to identify promising sectors and industries. The final step involves picking the best companies

within each industry. The performance target is to meet or exceed, net of fees, the comparative benchmarks

while maintaining a relatively low-risk portfolio structure. Additionally, risk management is critical and

should be measured and controlled through proper monitoring of active exposures relative to the stated

benchmarks.

Investment Process

Overview

Our economic research includes, but is not restricted to, an analysis of such indicators as interest rates,

inflation, unemployment, the housing market, monetary policy, and currency values. On a weekly basis,

SMIF, led by its Chief Economist, reviews the latest economic news and indicators. Taking into

consideration conclusions drawn from the economic research, the next step in the investigation process is

to identify sectors that appear to benefit from the economic conditions previously identified. The sectors

that are believed to outperform the general market will be over weighted in the portfolios, while sectors that

are expected to perform worse than the market will be underweighted. Once the student managers have

concluded what sectors they believe will outperform the market, they focus on identifying the best

companies within those sectors. The Student Managed Investment Fund’s investment process focuses on

fundamental research to make decisions on which stocks the fund should be holding. The appropriate

percentage of the holding, relative to the entire portfolio, is determined based on the investment team’s

desired exposure in a given sector as well as the desired exposure to the individual security.

The Universe Defined

The students participating in the fund are divided into groups. Each group is responsible for one sector, as

defined by the S&P 500. The nine sectors include Basic Materials, Consumer Discretionary, Consumer

Staples, Energy, Financials, Healthcare, Industrials, Technology, and Utilities. The analysts of each group

will then break their sector down into industries, and each analyst becomes an expert on one or several of

these industries. When it comes to individual stocks, our focus is on large to mid-capitalization stocks. We

seldom consider a stock with a market capitalization of less than $100 million, and we prefer to focus on

stocks with a market cap greater than $500 million. Each week the sector analysts will provide information

pertaining to the stocks in this defined universe.

The Market & Portfolio Overview

During each weekly meeting, the group, led by the Vice President of Finance, reviews the performance of

each of the four portfolios compared to the appropriate benchmarks. In addition to this, the equity portfolios

are reviewed on a sector-by-sector basis and compared to sector benchmarks. During the meeting, the group

will also discuss any market events specific to portfolio holdings, so that we can review and determine if

any immediate actions must be taken. Additionally, the portfolio’s active exposures are measured and

reviewed each week. Sector overweighting and underweighting are reviewed to determine if the current

level of exposure is appropriate. The sum of each company’s market capitalization, within a given sector,

is used to measure the exact proportion that a particular sector represents relative to the overall portfolio.

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The sector exposures will be bounded to closely mirror the index weights (S&P 500) to avoid undue levels

of unsystematic risk associated with overexposure to one particular sector. Sector overweighting and

underweighting will not exceed 5%, as guided by SMIF’s bylaws. These restrictions on the fund offer the

safety of diversification found in the S&P 500, while also offering the students an opportunity to actively

manage the fund.

Making a Recommendation

Student managers analyze the companies that exist in their designated sector. A sector consists of every

available company that falls into the given sector classification criteria and the stock universe, previously

defined. From this point, the members research the companies available in the sector, and based on their

analysis, recommend their top choices as investment opportunities. The information that is used to perform

stock analysis is obtained from various sources. These sources include, but are not restricted to, financial

websites such as: Bloomberg Professional, Morningstar, Yahoo! Finance, Reuters, Standard and Poor’s,

Charles Schwab, and the Securities and Exchange Commission. In addition to this, a vital part of our stock

analysis is the reading of annual reports. Student analysts are required to read the annual report and listen

to the conference calls of any company that the student may wish to recommend. Once members feel

confident they have sufficiently researched potential investments, they present the results to the group. This

presentation is held on the date the analysts’ sector is scheduled to present its overall recommendation. In

order for a security to be considered, a written report must be completed. This report is referred to as a

sector recommendation. The recommendation must also contain the percentage of the portfolio’s funds that

will be allocated towards the different stocks in that sector. Ultimately, the decision to invest in a security

being recommended is subject to a vote among all the members of the fund. In order for a stock to pass this

vote, a supermajority and the advisors approval are required.

There are three possible results from the vote, the first of which would be acceptance. If at least 80% of the

members feel the investment meets the criteria of the fund, the investment will be accepted and the President

and Vice-President of Finance perform the trades. A second alternative would be a decision to gather more

information to answer questions generated in the discussion before the members feel comfortable accepting

the investment. In the case requiring more information, the student manager making the recommendation

has the opportunity to use the time between meetings to gather more information and further consider

his/her recommendation. The recommendation will be reconsidered the following meeting and, at that time,

may be put to a vote. The final possible outcome would be that the fund members feel the recommendation

is unsatisfactory based on their insight, and the investment is rejected. This process ensures that every

recommendation is carefully examined by the entire investment team, for the express purpose of transacting

in the best interest of the fund.

Stock Selection

The objective in our research is to identify value investments. We define value investments as being

companies that are trading at levels less than their true intrinsic value. By investing in what we believe to

be undervalued or mispriced securities, we hope to make a profit when the market discovers the price

discrepancy. The ‘top-down approach’ process starts by identifying promising sectors and industries based

on our view of the macro economy. The analyst will then try to identify the best company in that particular

industry.

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Each sector starts by applying different variables into a database, comprising of any publicly traded

company, in search for the best companies from a valuation standpoint. Some of the key variables we use

are a price-to-book ratio of less than 1.5, price-to-earnings of less than 15, price to net tangible assets, etc.

To summarize, the following are quantitative and qualitative characteristics and metrics members employ

to identify value investments; however, all metrics need not be met:

A Price/Earnings ratio that is lower than the industry average

A PEG that is lower than the industry average

A Free Cash Flow/Sales ratio higher than the industry average

A Debt-to-Equity ratio that is lower than the industry average

A Price-to-Book ratio that is lower than the industry average

An Operating Margin that is wider than the industry average

Strong sustained future earnings growth

Strong Free Cash Flow growth

Strong management performance

Strong corporate governance practices

Sustainable competitive advantage

Positioned to benefit from social and environmental impacts

From the list of “value” companies, we then start digging into different aspects such as economic moat,

company/industry growth, liquidity, profitability, and solvency analysis. The term “economic moat” was

coined by Warren Buffet and refers to a company’s sustainable competitive advantage. The first thing we

would typically do is to see if the company is growing its market share through increased sales. In this

process we examine data for the last ten years. If the company has experienced market share growth during

this period, this would be a strong indicator of an economic moat. The ultimate test will then be to assess

how this top line growth is affecting the company’s margins and free cash flow to sales ratio. A company

that possesses an economic moat must be able to grow its sales and at the same time maintain or widen its

margins. A company that does not maintain its margins as revenues grow will fail this test. When evidence

for an economic moat is established, we will assess the reasons behind the moat. Is the moat due to

economies of scale, a patent protection, or brand recognition? We will use this information to assess the

sustainability of the moat.

After looking at the economic moat, we move on to the company’s growth prospects. We will use

information from the company’s annual report to identify the company’s key value drivers and assess the

growth prospects for the company. In this process, we will also look at professional analysts’ estimates. We

will then move on to look at profitability. This part goes back to our discussion of the economic moat, but

as that discussion revolved around margins, this part of the analysis looks at return on assets, financial

leverage, and the resulting return on equity. After this, we will assess a company’s financial health by

looking at its overall debt levels and liquidity.

The next task will be to analyze management performance. In this process, we use past performance as an

indicator of future behavior. We will look at the stock price under the leadership of the current CEO and

management team and compare it to that of the company’s competitors. We will also look at a company’s

corporate governance practices. Are management and shareholder interests aligned? Does the management

team maximize shareholder wealth, or are they more concerned with short-term profits and empire

building? We also carefully consider insider transactions, as insider selling or buying can affect our

perception of a stock.

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Although the fund mainly considers what we characterize as value investments, we will also consider

growth companies. These are companies that are expected to grow very fast and, as a result, are trading at

a substantial premium. If a high-growth company is considered for investment, the company will only be

purchased if members conclude that the security is still trading at a reasonable price. Since the volatility

associated with growth companies is higher than with value companies, stronger scrutiny is undertaken.

Student managers adhere strictly to the guidelines expressed, as well as guidance from the fund advisor.

Additionally, constant monitoring of the portfolio is required of all members, particularly the President,

the Vice President of Finance, and the Chief Risk Officer, to further ensure that these guidelines are met.

VI. Portfolio Summary

Second Half of 2015

In accordance with the process previously described, we use a “top-down” approach when determining

our investment strategy. As a group, we determine an economic outlook before allocating our assets

between nine sectors within the S&P 500. Our economic outlook helps us decide which sectors to

overweight, underweight, and match equally to our benchmark. Finally, we break it down even further by

industries within the sectors and companies within industries.

When looking at the structure of our portfolio, bear in mind that investments are made based on

fundamental analysis. These types of strategic investments seek to exclude short-term noise and capitalize

on long-term investments opportunities. The last six months of 2015 showed great volatility,

exemplifying poor market conditions and short-term noise. Our fund plans to hold securities during these

poor market conditions and focus on company fundamentals.

During the second half of 2015, both Seifert Foley and Stenehjem Funds underperformed. We compare

fund performance to that of the S&P 500, which lost 0.93% from June 30th to December 31st, 2015. Our

Seifert Foley and Stenehjem funds were down 6.69% and 6.36%, respectively, during the same period.

Underperformance during six months ending 2015 was largely a result of only a few stocks within each

sector. As pressure on the economy began hindering stocks, a handful of our companies experienced large

share price declines due to weakening company financials. Such investments were seen in our consumer

discretionary, consumer staples, and financials sectors.

Our industrials sector was the highlight during six months ending 2015. It provided returns of 0.52%

compared to its relative benchmark of -1.94%. The airline industry significantly supported this sector with

large returns due to low crude oil prices and subsequent fuel costs. General Electric and Hawaiian

Holdings were among the companies pushing our fund past its benchmark and into positive territory.

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As you can see by comparing the two charts, SMIF chose a relatively conservative approach to the sector

allocation process. As described in the Bylaws, SMIF weightings are allowed to deviate by no more than

5% compared to that of the S&P 500.

UTILITY4.50% ENERGY

11.00%

FINANCIAL16.50%

TECHNOLOGY20.50%

BASIC MATERIALS2.75%

CONSUMER STAPLES11.00%

INDUSTRIALS11.75%

HEALTH CARE12.00%

CONSUMER DISCRETIONARY

10.00%

SMIF Weights - Fall 2015

UTILITY3.01% ENERGY

6.98%

FINANCIAL16.32%

TECHNOLOGY22.71%



INDUSTRIALS10.03%

HEALTH CARE15.22%


13.09%

S&P 500 Weights - Fall 2015

21 | P a g e

First Half of 2016

As we transition into a new year, SMIF has taken a bearish approach to the broad market. Global

economics have been weak during 2016 which has been reflected in global stock markets. As we

reallocated our portfolio for the new year, we kept a macroeconomic view to adjust for potential foreign

market weakness. Europe, Middle East, and emerging markets in Asia will play a key role in how U.S.

markets play out during 2016. When looking at the U.S. economy, it remains relatively strong and

introduces investment opportunities and potential growth sectors. These global and domestic factors

influence our allocation decisions to help provide return and appropriate risk.

Energy, technology, consumer staples, and health care are sectors that we see underperforming relative to

the market. Thus, they will receive less allocation in our portfolio in an attempt to decrease exposure in

those sectors. Energy will be our third smallest allocation, at about 5.50% of the total fund. This is less

than the S&P 500 allocation of 6.57%. Crude oil prices continue to be an unknown and have consequently

changed our prior bullish outlook to a bearish one. Technology is our largest allocation of 22.50%, but is

lower than the S&P 500 of 22.9%. Consumer staples and health care are weighted at 9% and 14%

compared to 10.95% and 14.89% in the S&P. Historically, technology, consumer staples, and health care

are seen as a risky sectors. If markets were to continue a major downward correction, risky assets will

experience large sell-offs due to investors flocking to security havens.

As markets remain volatile, there are plenty of investment opportunities that SMIF plans to capitalize on

throughout 2016. Sectors that we are bullish on and have increased allocation for include financials, basic

materials, industrials, and consumer discretionary. These sectors show positive prospects because of past

performance and stability during poor market conditions. New portfolio allocations for our fund that lie

above the S&P 500 include financials, basic materials, industrials, and consumer discretionary. The

financial sector shows positive prospects due to its inexpensive valuation and strong fundamentals,

resulting in an allocation of 18.5%. Unfortunately, banks have debt in potentially defaulting oil

companies but remain as a limited exposure. Basic materials and industrials also provide well priced

companies and value investments. These two sectors should give stable returns in the form of dividends

and low volatility during potentially bad market conditions. As a result these two sectors will receive

allocation in our fund of 3.00% and 11.50% respectively. Finally, consumer discretionary may see a

strong year due to low crude oil prices. Consumers are seeing drastically smaller expenses at the pump

and will help support discretionary spending during 2016, resulting in an allocation percentage of

12.50%.

22 | P a g e

FINANCIAL, 18.50%

UTILITY, 3.50%

TECHNOLOGY, 22.50%

BASIC MATERIALS, 3.00%

INDUSTRIALS, 11.50%

ENERGY, 5.50%

CONSUMER DISCRETIONARY,

12.50%

CONSUMER STAPLES, 9.00%

HEALTH CARE, 14.00%

SMIF Weights - February 2016

FINANCIAL15.71%

UTILITY3.54%

TECHNOLOGY22.90%


INDUSTRIALS10.19%

ENERGY6.57%


12.46%


HEALTH CARE14.85%

S&P 500 Weights - February 2016

23 | P a g e

VII. Portfolio Performance

Overall Performance

As shown below, in the third and fourth quarter, the Seifert/Foley Portfolio trailed the S&P 500 by 5.71%

and the Stenehjem Balanced Portfolio trailed the S&P 500 5.38%. The Seifert/Foley portfolio is a straight

equity portfolio benchmarked to the S&P 500. The Stenehjem balanced portfolio is a mix of equities and

bonds benchmarked to fifty percent to the S&P 500 and fifty percent to the Barclay intermediate-

government credit index (GVI). Our fund calls this mixed benchmark the balanced index.

Returns for the Period June 30th, 2015 to December 31st, 2015:

Stock Portfolios 6/30/2015 12/31/2015 Return

Seifert/Foley Portfolio $ 473,146.71 $ 441,513.37 -6.69%

Stenehjem Balanced Portfolio $ 437,508.01 $ 409,694.43 -6.36%

S&P 500 (SPY) $ 205.89 $ 203.87 -0.98%

Balanced Index $ 158.07 $ 156.74 -0.84%

Bond Portfolios 6/30/2015 12/31/2015 Return

Stenehjem/Foley Bond $ 337,324.77 $ 335,679.23 -0.49%

Larson Fusion Fund $ 40,057.05 $ 39,650.60 -1.01%

Barclay Inter. Gov't/Credit Index (GVI) $ 110.25 $ 109.61 -0.58%

As shown above, the Seifert/Foley and Stenehjem Balanced portfolios both trailed the S&P 500 by over

5.00%. Our Stenehjem/Foley Bond portfolio beat the GVI by .09%. We have begun diversifying more

into our Stenehjem/Foley Bond portfolio and focusing on quality stocks in both the Seifert/Foley and

Stenehjem Balanced portfolios. Our fund continues to have a positive outlook for the coming months.

Year-to-Date Returns for the period (January 1st, 2016 to February 19th, 2016):

Stock Portfolios 1/1/2016 YTD Return

Seifert/Foley Portfolio $ 441,513.37 $ 401,397.96 -9.09%

Stenehjem Balanced Portfolio $ 409,694.43 $ 380,808.48 -7.05%

S&P 500 (SPY) $ 203.87 $ 192.00 -5.82%

Balanced Index $ 156.74 $ 151.65 -3.25%

24 | P a g e

Bond Portfolios 1/1/2016 YTD Return

Stenehjem/Foley Bond $ 335,679.23 $ 335,647.21 -0.01%

Larson Fusion Fund $ 39,650.60 $ 38,446.80 -3.04%

Barclay Inter. Gov't/Credit Index $ 109.61 $ 111.30 1.54%

Fixed Income Allocation

The decision of the Federal Reserve to initiate a rate hike in the Target Federal Funds Rate has

been met with much opposition since it was initiated this past December. Economic data both

domestically and internationally has shown that that the environment for rising interest rates is

premature at best. Quantitative Easing measures continue to take place in many of the world’s

strongest economies including the Eurozone and Japan. The divergence of these policies from

the United States has caused a “lower for longer” condition in our interest rates. We anticipated

that the rest of 2016 will remain in this state, as Fed Funds futures do not predict another rate

hike in the next twelve months. Accordingly, we do not believe that our bond portfolio will be

greatly affected for the coming year. The 10-year Note has dipped below the 1.75% yield mark

in February, furthering our inclinations that this interest rate environment will continue for the

foreseeable future.

Stenehjem-Foley Bond Fund

Cash Value: 144,446.52$ 43%

Bond Value: 192,878.25$ 57%

Total Value: 337,324.77$ 100%

25 | P a g e

Larson Fusion Fund – Alternative Investments

The Larson Fusion Fund is broken up into four sectors: Commodities and Energy, Interest Rates, Index

Trading, and Equities/Equity Derivatives. These sectors allow us to invest in a large variety of asset

classes ranging from commodities such as cattle and wheat to interest rates that can track inverse

mortgage rates or treasury yields. A pair of these sectors, Index Trading and Equities/Equity Derivatives,

also offer us the opportunity to directly hedge our equity portfolios. The opportunity to hedge our equity

portfolios through indexes or derivatives had previously not existed, but could be a great tool to offset

significant losses in our equity and fixed income funds. This fund was made possible by an incredibly

generous $42,500 donation by Edson Larson.

9%3%

2%

18%

23%

45%

Stenehjem-Foley Bond Fund

American Funds Tax-Exempt BondFund

Franklin Templeton High Yield Tax-FreeIncome

Pimco Emerging Local BondInstitutional Fund

Pimco High-Yield Institutional Fund

Vanguard Intermediate-TermCorporate Fund Admiral Shares Fund

Cash

26 | P a g e

Alternative Sector Allocation

Sector % of fund

Commodities/Energy 30.0%

Interest Rates 15.0%

Index Trading 35.0%

Equities/Equity Derivatives 20.0%

Total 100.0%

Semester Returns (June 30th, 2015 to December 31st, 2015):

Alternatives Portfolio 06/30/15 12/31/15 Return

Larson Fusion Fund $40,057.05 $39,650.60 -1.01%

S&P 500 (SPY) $205.89 $203.87 -0.98%

The fall semester of 2015 included a number of trades within the Larson Fusion Fund while also

maintaining holds on some of the investments from our inaugural alternative fund’s semester in the spring

of 2015. We remain long on MSCI India (INDA), an ETF that is a collective of mid- and large-cap stocks

in the Indian Stock Market. We believe this investment capitalizes on the incredible growth within the

developing country by diversifying our investments in some of its most prominent publically traded

companies. The Schwab U.S. REIT ETF (SCHH) was also purchased in the spring to follow the Dow

Jones U.S. Select REIT Index. This ETF provides the benefit of investing in housing, which has been one

of the most stable markets since the financial crisis. We also looked to track the performance of the

overall U.S. stock market from micro-, small-, mid-, and large-capitalization stocks, an objective we

achieve through the Vanguard Total Stock Market ETF (VTI), a holding that we has remained in the

Larson Fusion Fund since the spring. We also initiated positions in the spring in both Baidu, Inc. (BIDU)

and Alibaba Group Holdings Limited (BABA) to capitalize on the growing Chinese economy. These

holdings have largely been hampered by a weaker than expected economic outlook for their country, but

are seeing a considerable in share price as their businesses capitalize on their multinational operations.

Neither of these companies originally met SMIF’s traditional value-investing criteria, so we felt more

comfortable placing them within our alternative fund and seek to capitalize on their future potential. In

the fall of 2015 we initiated a few more positions within the Larson Fusion Fund. The first two, iPath

Pure Beta Coffee ETN (CAFÉ) and Teucrium Wheat Fund (WEAT) capitalize on a slowing downtrend in

the commodities super-cycle while also taking advantage of rising regional prospects for each

commodity. Additionally, we also began investments in the iShares Floating Rate Bond ETF (FLOT) and

the Direxion Daily 7-10 Year Treasury Bull 3x ETF, allowing us to realize gains in a rising interest rate

environment in the future. This semester, we are looking to further our investments within the Larson

Fusion Fund. After only being initiated in the spring of 2015, our alternative fund still held roughly half

of its assets in cash. We are now actively seeking investment prospects to capitalize on returns in markets

which we are otherwise unexposed to in our traditional funds.

27 | P a g e

28 | P a g e

Individual Stock Performance

*** We do not own any shares in the sector SPDR’s (ETF’s), with the exception of the XLV in the

Healthcare sector. These instruments are listed for benchmark purposes.

29 | P a g e

*** We do not own any shares in the sector SPDR’s (ETF’s). These instruments are listed for benchmark

purposes.

30 | P a g e

Top Performing Stocks during the Second half of 2015:

Ticker Return

First Solar Inc. (FSLR) 55.38%

Hawaiian Holdings Inc. (HA) 47.01%

Tyson Foods Inc. (TSN) 25.10%

Valero Energy Corporation (VLO) 18.08%

General Electric Company (GE) 17.24%

First Solar Inc. (FSLR)

First Solar, Inc. was the top performing stock in the Student Managed Investment Fund for the ending 5

months of 2015. SMIF had a return of 55.38% over that time in First Solar, Inc. First Solar, Inc. designs

and manufactures solar modules. The company uses a thin film semiconductor technology to manufacture

electricity-producing solar modules. First Solar is headquartered in Tempe, Arizona. This return was

mainly driven from a continuing effort to implement more sustainable energy alternatives and much

stronger than expected earnings. First Solar, Inc. holds a large amount of cash and a low amount of debt

which allows them outstanding financial flexibility, such as to finance new and existing projects. We

currently hold 250 shares of FSLR in the Seifert/Foley Fund at a cost basis of $43.50 per share.

General Electric Company (GE)

General Electric Company is one of our top five performing stocks for the second half of 2015. During

this time we saw a return of 17.24%. General Electric Company is a globally diversified technology and

financial services company. Some of their products include aircraft engines, power generation, water

processing, household appliances, consumer financing, and industrial products. Towards the end of 2015,

General Electric announced that they completed over $100 billion in asset sales related to their GE

Capital segment. This move is to put the focus back into their industrial core and to not be so reliant on

the financial services side of their business. By 2018, GE plans to have an earnings mix of 90% from their

industrials core and 10% from GE Capital. With General Electric’s focus back on what they do best, we

hope to continue to see profits going forward.

Hawaiian Holdings Inc. (HA)

Hawaiian Holdings Inc. provides scheduled and charter air transportation of passengers, cargo, and mail.

These services are provided among the islands of Hawaii and between Hawaii and several West Coast

cities and destinations in the South Pacific. Hawaiian Holdings was one of the top five performing stocks

in the Student Managed Investment Fund for the second half of 2015. During this time we saw a return of

47.01%. Hawaiian Holdings was a great stock for us for the time we held it. Hawaiian Holdings benefited

due to the steep drop in oil prices throughout 2015.

31 | P a g e

Tyson Foods Inc. (TSN)

Tyson Foods is one of our top five stocks over the last semester. Tyson Foods produces, distributes, and

markets chicken, beef, pork, prepared foods and related products. Tyson Foods sells these products to

national and grocery retailers, distributors, military commissaries, food processing companies, and

international export companies. They operate in several countries around the world including the United

States, Brazil, China, India, and Mexico. Over the last semester we have seen a return of 25.10%. Tyson

Foods have seen a steadily rising revenue over 2013 to 2015. Tysons financial statements have been

improving and beating estimates. This is due to lowering cost and higher profits. Tyson also had a string

of acquisitions shortly before this time frame, the better number may be the acquisitions paying off for

Tyson Foods.

Valero Energy Company (VLO)

Valero Energy Corporation was one of our top five holdings for the semester. We realized an 18.08%

gain on the equity. As surprising as it may be to some that an energy holding would make the top five,

here is why. Valero unlike many of our energy holdings is a refinery operating in the U.S. Canada and

Aruba. While oil remains low as of 2/22/2016 at $34.70 production remains at an all-time high. Due to

this over supply refineries have capitalized on the constant demand for crude at these low prices. Even

with the talks of a production cap it would be instigated at a high therefore refineries remain, in my

opinion, a solid investment going forward in early 2016. Also the godfather of the market Mr. Warren

Buffet himself has heavily invested in Phillips 66 ($200 million) another refinery, making it his only

energy holding in his top fifty holdings. Although the price may be uncertain supply remains along with

an increased demand at these lows prices.

VIII. Portfolio Risk

Over the last 12 months, there has great volatility in the U.S. and foreign markets. Market volatility is a key

area of focus going into 2016 because of potential economic downturns around the world. The Chief Risk

Officer (CRO) has been a crucial position in the Student Managed Investment Fund, tasked with monitoring

each stock investment and entire portfolio risk. Potential complications of a long only mutual fund, such as

SMIF, are ensuring the goals of the fund adhere to its beliefs and bylaws. The Student Managed Investment

Fund currently holds 50 firms in the Seifert/Foley and 49 firms in the Stenehjem. Again, 2016 will be an

important year for SMIF to maneuver volatile markets and a potentially crippled global economy. SMIF

stands to reduce its volatility through diversification, steady dividend income, and select growth sectors.

The CRO has many different risk assessment tools to ensure that the Student Managed Investment Fund is

adhering to the proper degree of risk exposure. The CRO will monitor the risk profile of the Student

Managed Investment Fund, ensuring that no trading errors occur, and verifying that exposure on both

portfolio and sector levels are appropriate. This is done through a weekly CRO report, in which the Chief

Risk Officer is responsible for answering seven important questions, which include:

1.) What are the current sector exposure percentages of the equity portfolios as compared to the

S&P 500 (as a percentage of each equity portfolio)?

2.) Does any stock have more than 15% of the value of either equity portfolio?

3.) What is the percentage of each sector invested in companies with market values less than $1

billion (as compared to current sector market value for each portfolio)?

4.) Is less than 30% of the total portfolio invested in companies with market capitalizations of less

than $1 billion (as compared to the equity value of each portfolio)?

32 | P a g e

5.) Is there less than 40% of the total portfolio invested in foreign companies?

6.) What is the percentage of the debt portfolio that is allocated to foreign debt?

7.) Is there any individual non-government bond that exceeds 15% of the market value of the fixed-

income portfolio?

The Student Managed Investment Fund has core Bylaws in place to regulate our risk positions. SMIF

Bylaws make sure that no individual stock has overwhelming influence on the portfolio's performance, that

we are mainly exposed to large and middle capitalization stocks, that we have limited amounts of capital

invested into foreign companies, and that our sector weightings are not significantly different from those

used in that S&P 500. Previously we have looked at SMIF’s sector allocation comparing it to that of the

S&P 500 under the Portfolio Summary section, and listed below you can see a breakdown of SMIF’s

exposure to the different stock classifications.

Seifert/Foley Portfolio (12/31/15) Stenehjem Portfolio (12/31/15)

Category: % of fund: Category: % of fund:

Large Capitalization Stocks 88.68% Large Capitalization Stocks 95.92%

Middle Capitalization Socks 5.66% Middle Capitalization Socks %

Small Capitalization Stocks 5.66% Small Capitalization Stocks 11.00%

Micro Capitalization Stocks 0.00% Micro Capitalization Stocks 0.79%

Seifert/Foley Portfolio (02/19/16) Stenehjem Portfolio (02/19/2016)

Category: % of fund: Category: % of fund:

Large Capitalization Stocks 89.80% Large Capitalization Stocks 95.92%

Middle Capitalization Socks 4.08% Middle Capitalization Socks 2.04%

Small Capitalization Stocks 4.08% Small Capitalization Stocks 2.04%

Micro Capitalization Stocks 2.04% Micro Capitalization Stocks 0.00%

We have also listed the most relevant stocks in their respective portfolios, with relevance being measured

by the stock’s market value. The CRO specifically monitors each firm’s risk characteristics, including its

revenues from foreign countries, amount of currency risk, and international regulations. Listed below, are

the top three weighted/relevant stocks in their respective portfolio.

33 | P a g e

As of 02/17/2016

As of 11/27/2015

As you can see, the most relevant three stocks in each portfolio carry more than 10% of the portfolio

value. AAPL and INTC hold large positions in both the Seifert/Foley and Stenehjem funds, holding one of

the top two allocation percentages. None of these stocks are foreign. However, a large portion of them have

exposure to foreign countries. Apple does most of its manufacturing in China, whereby Intel receives most

of its revenue. Monitoring the level of stock exposure, as mentioned before, is an important task of the

CRO. Listed below is the fund’s total foreign stock exposure broken down by portfolio.

Seifert/Foley

Company $ Allocated % of Portfolio

AAPL $27,096.30 6.68%

INTC $24,122.00 5.95%

JPM $20,151.00 4.97%

Total $71,369.30 17.60%

Stenehjem Company $ Allocated % of Portfolio

INTC $17,230.00 5.93%

AAPL $14,137.20 4.86%

LLY $12,960.00 4.46%

Total $44,327.20 15.25%

Seifert/Foley

Company $ Allocated % of Portfolio

AAPL $21,617.70 5.37%

INTC $20,048.00 4.98%

JPM $17,247.00 4.29%

Total $58,912.70 14.64%

Stenehjem Company $ Allocated % of Portfolio

INTC $14,320.00 4.26% AAPL $11,278.80 3.36% GILD $10,732.80 3.20%

Total $36,331.60 10.82%

Top 3 Holdings

34 | P a g e

Foreign Exposure

Seifert/Foley

Country Total % of Portfolio

US $ 308,391.95 88.69%

Japan $ 10,526.00 3.03%

Cayman Islands $ 6,771.00 1.95%

China $ 2,998.00 0.86%

Norway $ 6,034.50 1.74%

United Kingdom $ 3,337.30 0.96%

Sector ETF $ 6,437.00 1.85%

Canada $ 2,091.00 0.60%

South Korea $ 1,131.60 0.33%

Total $ 347,718.35 100.00%

Stenehjem

Country Total

% of

Portfolio

US $ 296,268.70 92.95%


Japan $ 7,356.25 2.31%

South Korea $ 1,718.15 0.54%


Canada $ 2,070.00 0.65%

China $ 1,809.00 0.57%

Total $ 318,739.10 100.00%

Seifert/Foley


US $ 359,508.20 88.62%

Japan $ 12,437.00 3.07%


China $ 3,615.00 0.89%

Norway $ 6,912.00 1.70%


Sector ETF $ 7,209.00 1.78%

Canada $ 3,383.00 0.83%

South Korea $ 1,096.20 0.27%

Total $ 405,664.35 100.00%

Stenehjem


US $ 228,062.60 92.98%


Japan $ 5,789.30 2.36%

South Korea $ 1,320.20 0.54%


Canada $ 1,580.50 0.64%

Total $ 245,293.20 100.00%

As of 11/27/2015

As of 2/17/2016

35 | P a g e

Foreign Holdings

Seifert/Foley

Company $ Allocated % Allocated Sector Country

TM $ 12,437.00 3.07% Consumer Discretionary Japan

XLV $ 7,209.00 1.78% Healthcare Sector ETF

STO $ 6,912.00 1.70% Energy Norway

FDP $ 4,476.00 1.10% Consumer Staples Cayman Islands

BP $ 4,005.45 0.99% Basic Materials United Kingdom

HNP $ 3,615.00 0.89% Utilities China

TGA $ 3,383.00 0.83% Energy Canada

CWCO $ 3,022.50 0.75% Utilities Cayman Islands

PKX $ 1,096.20 0.27% Basic Materials South Korea

Stenehjem






UFS $ 2,076.00 0.71% Basic Materials Canada


Seifert/Foley



XLV $ 6,437.00 1.70% Healthcare Sector ETF

STO $ 6,034.50 1.60% Energy Norway



HNP $ 2,998.00 0.79% Utilities China


TGA $ 2,091.00 0.55% Energy Canada


Stenehjem Company $ Allocated % Allocated Sector Country





UFS $ 1,580.50 0.64% Basic Materials Canada


As of 11/27/2015

As of 2/17/2016

36 | P a g e

IX. RISE, GAME, ENGAGE, and Global IRC

Last Spring semester, SMIF competed in several national and global competitions. As one may recall, 2009

was a great year for SMIF. The two portfolios under management, the Seifert/Foley and the Stenehjem,

returned 42.31% and 32.19%, respectively. This compares with the S&P 500’s return of 26.35%. During

our Semi-Annual Report fall of 2009, we were proud to announce that these results gave us the first and the

second place in the 2010 undergraduate growth portfolio competition at the RISE (Redefining Investment

Strategy Education) forum in Dayton, Ohio. This student managed portfolio competition, which is hosted

by the University of Dayton, is for universities from all over the world. The winners are the universities

(portfolios) with the highest risk-adjusted return during the previous year. We have attended the RISE

Competition for a total of 3 years, winning fourth place in 2008. In addition to the competition, the RISE

forum gives students and professors a unique opportunity to listen, interact, and question some of the

world’s greatest financial professionals. Such professionals as Ben Bernanke (Chair of the Federal Reserve

Board), Jack Bogle, and Myron Scholes have all attended the forum in the past. In 2010, professionals such

as Bob Doll (Blackrock) and Patrick Dorsey (Morningstar) attended the forum. In addition to these and

other professionals, 302 universities from 73 countries attended the conference in 2010. We are proud to

have represented the University of North Dakota and gained international recognition for our performance.

The performance speaks volumes for SMIF students, the faculty advisor, and the College of Business and

Public Administration as a whole. The opportunity to interact with some of the brightest investment minds

in the world and to share our experience with other student managed investment funds was truly remarkable.

37 | P a g e

The RISE Forum was cancelled in the fall of 2014 giving SMIF the opportunity to attend the ENGAGE

Symposium in March 2015. The ENGAGE symposium is another great opportunity for students to be

inspired by featured speakers that are among the best and brightest in corporate America, government, and

the financial media. The Student Managed Investment Fund also participates against other Universities in

a portfolio competition.

In March 2015, SMIF participated at the GAME (Global Asset Management Education) forum in New

York, New York. The GAME forum and accompanying portfolio competition had a similar structure as the

RISE forum. Once again the GAME forum attracted high profile speakers from Goldman Sachs, ICE,

Morningstar, CNBC, Morgan Stanley and many more. We sent three of our upper SMIF members to

represent University of North Dakota at this conference. The forum hosted speaking events on current

issues, discussion panels, workshops, and networking, as well as career opportunities in the industry. Again,

Universities investment portfolios were entered to compete against one another. University of North Dakota

SMIF brought home first place in the Fixed Income for an Undergraduate Program with the Seifert/Foley

Bond Portfolio.

38 | P a g e

SMIF also competed in the Global Investment Research Challenge. Contrary to the RISE, ENGAGE, and

GAME competitions, which are portfolio management competitions, this competition involves specific

company analysis. The competition is hosted by the Chartered Financial Analyst (CFA) Institute and “offers

students the unique opportunity to learn from leading industry experts and compete with peers from the

world’s top finance programs. The universities assemble teams of three to five business and finance

students who work directly with a company in researching and preparing a company analysis.”

In the fall of 2015 we gathered a team of five students that represented SMIF, the College of Business and

Public Administration and UND at the local stage of this competition. The team consisted of members

Jordan Huus, Logan Stepan, Brandon Beyer, Rachel Gellerman and former member David Talley. The

competition is a unique learning experience for the students that participate. The team is able to seek advice

from a Chartered Financial Analyst (CFA) and learn new company analysis techniques. The team was able

to experience a unique opportunity usually restricted to professional analysts, the ability to interact with the

company’s management team which adds a new dimension to the analysis process. In addition to these

factors, the research process was a university capstone course by itself. Elements of company valuation,

competitive analysis and financial forecasting all contribute to the final product.

Perhaps the most appealing opportunity gained from Global IRC competition is that all the current and

future members of SMIF can benefit from these competitions. It is the passing down of knowledge and

experience from the senior members to the junior members that allows the fund to continue to grow and

excel. We have the unique ability to allow students the opportunity to take SMIF course for credit

throughout several semesters. This allows the transfer of knowledge and experience in stock selection that

is key to our future performance. Opportunities to compete in, and attend events such as RISE, ENGAGE

and GAME, as well as stock analysis competitions such as Global IRC, allow members to gain insight and

understanding that they may not gain elsewhere. By communicating and being involved in the unique

experiences, the Student Managed Investment Fund members can elevate their abilities.

39 | P a g e

In the fall of 2014, a group of students visited the Minneapolis branch of the Federal Reserve. They got a

tour of the building and learned about the different operations that happen at that location. In addition, the

group was able to meet UND Alumnus Mark Stutrud who is the co-founder and CEO of Summit Brewery.

The students toured the brewery and learned more about the company and Mr. Stutrud himself. Overall it

was an incredible experience for the students and will prove to be a beneficial networking opportunity in

the future.

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X. Spring 2016 Analyst Profiles

The following are the members of the Student Managed Investment Fund for the Spring 2016 semester,

supported by the faculty advisor Dr. William Smith.

Student Role Major

Senior Officers

Logan Stepan President Investments

Nicholas Dobratz VP of Finance Investments

Brandon Beyer VP of Alt. and Fixed Income Investments

Rachel Gellerman VP of Operations Investments

Matt Davis Chief Economist Investments/Economics

Jordan Huus Chief Risk Officer Investments

Junior Officers

Isaac Schadewald Junior Alternatives Investments

Patrick Stadum Junior Alternatives Investments

Jake Eidson Chief Technical Analyst Investments

Samuel Ohrn Junior Economist Investments

Joe Hackman Assistant VP of Operations Investments

Basic Material Sector

Dylan Hughes Co-Lead Analyst Investments/Accounting

John Cassidy Co-Lead Analyst Investments

Consumer Discretionary Sector

Justin Smaaladen Lead Analyst Investments

Jon Haaven Junior Analyst Investments

Consumer Staple Sector

Jake Eidson Lead Analyst Investments

Jake Eischens Junior Analyst Investments

Justin Stanley Junior Analyst Investments

Energy Sector

Samuel Ohrn Lead Analyst Investments/Economics

Chad Dalquist Junior Analyst Investments

Jason Barta Junior Analyst Investments

Luke Loken Junior Analyst Investments

Financial Sector

Joe Hackman Lead Analyst Investments

Sean Hatlen Junior Analyst Investments

Trent Meyer Junior Analyst Investments/Accounting

41 | P a g e

Health Care Sector

Patrick Stadum Lead Analyst Investments

Rachel Olson Junior Analyst Investments

Arthur Ostman Junior Analyst Investments

Industrial Sector

Grant Seymour Lead Analyst Investments

Tyler Capocasa Junior Analyst Investments

Technology Sector

Isaac Schadewald Lead Analyst Investments

Robert Cerza Junior Analyst Investments

Austin Pakola Junior Analyst Investments

Alex Hunt Junior Analyst Aviation Management/Management

Utility Sector

Cody Morsching Co-Lead Analyst Investments/Accounting

Tyler Fern Co-Lead Analyst Investments

Commodities/Energy

Ike Schadewald Lead Analyst

Samuel Ohrn Junior Analyst

Justin Smaaladen Junior Analyst

Sean Hatlen Junior Analyst

Luke Loken Junior Analyst

Jon Haaven Junior Analyst

Alex Hunt Junior Analyst

Jake Eischens Junior Analyst

Interest Rates

Patrick Stadum Lead Analyst

Andrew Backhaus Junior Analyst

Jake Eidsen Junior Analyst

Tyler Fern Junior Analyst

Chad Dahlquist Junior Analyst

John Cassidy Junior Analyst

Index Trading

Patrick Stadum Lead Analyst

Joe Hackman Junior Analyst

Jason Barta Junior Analyst

Chase Johnson Junior Analyst

Rachel Olson Junior Analyst

Dylan Hughes Junior Analyst

Cody Morsching Junior Analyst

Austin Pakola Junior Analyst

Justin Stanley Junior Analyst

42 | P a g e

Equities/Equity Derivatives

Ike Schadewald Lead Analyst

Grant Seymour Junior Analyst

Bobby Cerza Junior Analyst

Arthur Ostman Junior Analyst

Trent Meyer Junior Analyst

Tyler Capocasa Junior Analyst

XI. Acknowledgments

On behalf of the members of the 2016 Student Managed Investment Fund, we want to thank you for the

opportunity to take part in this one-of-a-kind educational experience. We are honored to have the experience

to gain knowledge of portfolio management, stock selection, and valuation through an incredibly unique

and rewarding experience. Being entrusted with a portion of the University’s endowment, while having

access to the A. Kirk Lanterman Center, allows us a “hands-on” approach to learning that will prove to be

very beneficial to our futures. We would also like to specially acknowledge the gracious donors who have

made this possible. A special thanks goes out to Mr. James Seifert and wife Mrs. Nancy Seifert, Mr. Lee

Stenehjem and wife Mrs. Sue Stenehjem, and Mr. Robert Foley and his family; thank you for this

opportunity. We would also like to extend our gratitude to Dean Margaret Williams for all of her support

and for granting us Bloomberg terminal access. Through the utilization of the Bloomberg terminals, we

have gained hands-on experience and useful tools that will be crucial to the success of both the fund and

the students in the future.

Through the years, we have effectively learned how to transform investment theory into practice by

analyzing companies, by interpreting economic indicators and their effect on the market, and by managing

four fully diversified equity and bond portfolios. Our hope is that this class continues to be a prominent part

of the undergraduate program in the UND College of Business and Public Administration, as we feel it has

been one of the most relevant and rewarding classes in our curriculum.

Sincerely,

UND Student Managed Investment Fund

Documents

SEMI-ANNUAL REPORT – October 7, 2010