The Marquette MVP Fund seeks to provide long-term capital appreciation through the construction of a long-only “best ideas” concentrated portfolio of undervalued small cap US and international stocks.
October 1, 2017
Marquette University’s Applied Investment Management (AIM) program was selected to compete in the Peeptrade University Challenge, a three-month long event in which teams of graduate and undergraduate students from the top business schools compete to best manage a $1,000,000 portfolio.
Marquette’s AIM team comprises six students and is advised by Dr. David Krause, AIM Director, and William Walker, Executive Co-Teacher in the AIM program. The student members of the Marquette MVP Fund include: Kevin Blank, Joe Flynn, Derek Grifka, Adam Hamilton, Michael Robinson and Ryan Thern.
“Our program was selected to compete against students from some of the leading global business schools,” said Dr. Krause, the director of the AIM program. “This is a great opportunity for Marquette’s AIM program to again showcase our skills. This is also a another honor for the program.” To view the team’s strategy, please see the Investment Policy Statement below.
During the PeepTrade University Challenge, individual investors can follow the trading activity of university investment clubs in real time on PeepTrade, an online platform where users “peep” into the portfolios of other investors. Users pay a subscription fee to view the activity of a particular team, and the returns from the portfolio are donated to a charity pre-selected by that group of students.
The teams will post their trading activity from October 2nd to December 1st. Teams had to submit their investment policy statements by October 1st and on December 2nd each team will present and defend their investment portfolio performance in Chicago to a panel of experts, who will determine which group managed their portfolio most effectively.
To track the team's progress, follow AIM on Twitter at @MarquetteAIM.
Marquette MVP Fund
Investment Policy Statement
Fall 2017 PeepTrade University Challenge
Asset Class: Long-only common stock
Inception Date: October 2, 2017
Starting Capital: $1,000,000
Benchmark: S&P 500 Index
Portfolio Team Members: Kevin Blank, Joe Flynn, Derek Grifka, Adam Hamilton, Michael Robinson and Ryan Thern
Advisors: David Krause and Bill Walker
Investment Philosophy: The Marquette University Applied Investment Management (AIM) program is based upon the core knowledge embedded within the Chartered Financial Analyst (CFA) curriculum. We believe that thorough fundamental research and valuation analysis is the foundation to creating excess returns within a common stock portfolio. The Marquette MVP Fund seeks to provide long-term capital appreciation through the construction of a long-only “best ideas” concentrated portfolio of undervalued small cap US and international stocks. Our bottom-up approach to stock selection is driven by extensive research and valuation analysis, leading us to identify mispriced stocks within the least efficient segments of the stock market. Only the companies that we believe have strong overall business models, solid management teams and attractive valuations are added to our portfolio.
Principal Strategy: The Marquette MVP Fund seeks to employ a “best ideas” approach to common stock investing. Cohen, Polk and Silli (2010) found that the stock that active managers display the most conviction towards ex-ante, outperformed the market by approximately 8 percent per year. The results for managers' other high-conviction investments (e.g. top five stocks) also exhibited positive alpha over a full market cycle. Creating a concentrated portfolio from the two Marquette AIM Funds (containing US small cap and international stocks based on our investment philosophy) comprised only of our “best ideas” stocks, should outperform the overall market.
Portfolio Selection Criteria: Based on the strategy, the Marquette MVP Fund’s approach is to create a “best ideas” portfolio combining approximately 10 to 20 stocks selected from the existing AIM Small Cap Fund and the AIM International Equity Fund. These long-only portfolios are the product of detailed fundamental analysis performed and voted upon by a super-majority of the members of the AIM program. The selection process starts by choosing stocks from these portfolios that have what we believe are the best risk-to-reward metrics. Common elements of each stock in the fund will include: an experienced management team; a strong balance sheet; a catalyst or economic force that serves as a tailwind; an attractive valuation; and a superior and defendable business model. The equally weighted portfolio is to be constructed without regard to firm size, style, region, risk factor or sector.
Return Objective: The return objective of the Marquette MVP Fund is to outperform the S&P 500 Index on a risk-adjusted basis over the long term. We expect that given the relatively large active risk contained within the portfolio that actual returns and volatility may vary from expectations and objectives across short-term time periods.