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SFU SIAS Fund: Highlights and Key Strategies

The beginning of the SFU SIAS fund originated with $5.6 million and on February 21, 2011 the fund hit a record high of $10.8 million under management, ranking itself as the largest...

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The SFU Beedie SIAS 2011 team

The beginning of the SFU SIAS fund originated with $5.6 million and on February 21, 2011 the fund hit a record high of $10.8 million under management, ranking itself as the largest student-run investment fund in Canada. The Q1 Performance Review for the team will be held on Friday, May 27, 2011 in Vancouver, BC. In preparation for our next presentation, I have looked back at the highlights of the fund’s performance and key strategies from the past year.

The fund experienced a total return of 9.89%, the largest growth since 2003. The Canadian Equity portfolio gained 18.50% and contributed to almost half of the fund’s total return. Our holdings were the major contributors to Canadian Equity’s performance and reflected the team’s exceptional stock selection. Global Equity experienced large volatility during the year, which is representative of the turmoil across the globe (Haiti earthquake, the BP Deep-water Horizon oil spill and Iceland’s volcanic eruption), ended the year with a 5.00% return. Key strategies included investing in companies emphasizing overseas growth in Asian and the Emerging markets in the first quarter and investing in the U.S. at year-end. The Fixed Income Team took a conservative investment approach due to continually compressing yield curves. Their key strategy has been to invest in bonds that would immunize the portfolio against interest rate changes.

To manage our risk, we adopted the Value-at-Risk (VaR) model developed by previous cohort. The model was used to calculate the potential losses that the portfolio would expect to lose. A major part of understanding risk is realizing how much risk we are taking on for the return that we expect to realize. As a team, we aim to minimize the risk and maximize return at optimal levels, which is sustained by the Risk Metrics team.

The Compliance and Performance team strive towards improving performance evaluation for the Fund. They have implemented a new model for one portfolio that has significantly improved attribution accuracy and are currently implementing this method to evaluate the performance of the Fund as a whole.

I look forward to sharing more of my exciting and valuable experiences over the next few months on the SFU MBA blog: http://www.afewgoodminds.com/

Written by Meadow Wu, edited by Lauren Looi

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