Ben Somers and Ramon Pitter of Flowtrack were recent guests at Marquette University

 Two Digital Asset Investment Professionals Visited Marquette's AIM Program on Wednesday, January 26th

Today Marquette’s AIM program virtually hosted Ben Somers (COBA ’98) and Ramon Pitter of Flowtrack, a digital asset fund https://flowtrackfund.com/

The AIM students had an opportunity to interact with two digital asset investment pioneers who brought the class up-to-date on the world of blockchain and cryptocurrencies. They have provided valuable insights and helped the AIM students understand their investment process and how they will manage portfolios of digital assets for institutional investors (e.g., pension funds, sovereign wealth firms, universities, and foundations).

Ben and Ramon met throughout the day with a variety of Marquette faculty, students, and staff (including a meeting with Sean Gissal, CIO of the University’s endowment fund). An interesting and lively informal meeting was held with 25 students and faculty during the afternoon. The Q&A session was a highlight of the day for many of those in attendance. 

Dr. David Krause, AIM program director, commented “This was a great way to start of the semester. Ramon and Ben were excellent speakers and connected with the students. Their explanation of the history and current environment for digital assets was outstanding. They did a lot of the heavy lifting for me with their straightforward and clear explanation of topics like decentralized finance (DeFi) and possible cryptocurrency regulation.”

A strong turnout of Finance faculty, as well as an hour-long visit with the Keyes Dean of the College of Business Administration, Tim Hanley. The guests also interacted with Dan Tranchita, Executive-in-Residence, as well as Joe Wall and Bill Walker of the AIM program.  

Marquette's AIM Small Cap Fund is up 116% over past 5 years (vs. benchmark return of 77%)

 The Marquette AIM Small Cap Fund has generated an average annual return of 16.70%, which is an alpha of 4.50% annually versus the Russell 2000 over the past 5 years.

The student-managers of the Marquette AIM Funds have generated large alpha based on stock selection and not market timing. The Small Cap and International Equity Funds are sector neutral, which means that the excess returns are produced from fundamental equity research and not trying to pick sector winners. This has been the cornerstone of the AIM program since its inception in 2005 - we aim to produce strong financial research analysts who can work in any segment of the financial services industry.

Marquette AIM International Equity Fund Performance for 2021

 The AIM Class of 2022 generated nearly 900 bps of alpha in the International Equity Fund during 2021

It was an exceptional year for the student-managers of the AIM International Equity Fund. The Class of 2022 generated a 16.71% total return for the twelve months ending on 12/31/21. This beat the MSCI All World Country Index ex-US (benchmark) return of 8.27% for 2021.

The returns of the International Equity Fund began to beat the benchmark in June and continued the trend throughout the remainder of the year. The performance surged in October with strong returns from the Financial and Technology sector holdings.

Only two sectors detracted substantially from the overall performance - Utilities and Energy. The International Fund had no holdings in the Energy sector during the year and lost nearly 80 bps in overall performance as a result. The students made the decision to avoid any energy holdings - especially those related to fossil fuels. 

Unlike the Small Cap Fund, only one stock generated a return in excess of 100% (Endava) during 2021. Nevertheless, there were many strong performing stocks in the technology and financial services sectors. The students were able to avoid any major underperforming holdings during the year.

 

Overall the AIM International Fund held high quality stocks with stronger, on average, expected earnings growth than the benchmark while maintaining a sector neutral positioning (with the exception of Energy). While the average price multiples were higher than the benchmark average and the European holdings did better than other regions.

Overall the performance of the AIM International Fund was very impressive during 2021 despite the two Covid-19 pandemic waves that cast considerable uncertainty in the markets. The AIM Class of 2022 continued the tradition of generating positive alpha using fundamental analysis techniques. The performance of the International Fund was the best recorded by an AIM class!

Marquette AIM Small Cap Equity Fund Performance for 2021

The AIM Class of 2022 created over 200 bps of alpha in the Small Cap Equity Fund during 2021

It was another strong year for the student-managers of the AIM Small Cap Equity Fund. The Class of 2022 generated a 17.54% total return for the twelve months ending on 12/31/21. This beat the Russell 2000 (benchmark) return of 15.38% for 2021.

 

The returns of the Small Cap Fund were below the benchmark during the first half of 2021; however, the performance surged in August and October with strong returns from Healthcare, Real Estate, and Consumer Discretionary holdings.

Only two sectors detracted from the performance - Technology and Energy. The Small Cap Fund had no holdings in the Energy sector during the year and lost 100 bps in overall performance as a result. The students made the decision to avoid any energy holdings - especially those related to fossil fuels. 

Four stocks generated returns in excess of 100% (with two others nearly doubling as well) during 2021. B. Riley Financial and Dick's Sporting Goods were the top performers, followed by Customers Bancorp and two REITs. 

Overall the AIM Small Cap Fund held higher quality stocks, on average, than the Russell 2000 while maintaining a sector neutral positioning (with the exception of Energy). While the average price multiples were higher than average, the underlying fundamentals of the stocks in the AIM Fund were superior to the Russell 2000 average ROA, ROE, and profit margins.

The AIM Small Cap Fund had a slight growth tilt; however, it was not nearly as pronounced as previous years. The portfolio had a beta similar to the Russell 2000 and the alpha generated came from superior stock selection.

Overall the performance of the AIM Small Cap Fund was impressive during 2021 despite the two Covid-19 pandemic waves that cast considerable uncertainty in the markets. The AIM Class of 2022 continued the tradition of generating positive alpha using fundamental analysis techniques.