Sunday, August 13, 2017

After Nearly 12 Years of Managing the AIM Small Cap Funds - How's the Performance?

7.12% Net Annualized Returns for the Small Cap Fund Since September 2005

After nearly 12 years of managing the AIM Small Cap Fund, the students in Marquette's Applied Investment Management program have generated the exact return performance as the average US Small Cap Blended mutual fund (7.12% net annualized return). During this holding period, similar to over three-quarters of the active small cap fund managers, the passive benchmark (Russell 2000 Index) outperformed the fund with an average annual return of 8.07%. 

AIM Small Cap Fund vs. Russell 2000 Index and Average Small
Blend Mutual Fund (as of 7/31/2017) - Click to Enlarge Table

The AIM Fund generated a strong Sharpe Ratio of 0.41 (the statistic most frequently used to measure risk-adjusted returns) during the period versus 0.44 for the Russell 2000 Index. Interestingly, the student-managed fund displayed lower risk levels than the benchmark and the average mutual fund (lower Beta and Standard Deviation). As a result, the AIM Small Cap Fund generated slightly better risk-adjusted return measures than the average small cap mutual fund (Information Ratio, Capture Ratios, and Batting Average). 

The debate about active vs passive equity investing will be discussed during the first several weeks of the fall semester. Marquette is pleased with the overall performance of the actively managed AIM funds - especially following the Financial Crisis of 2008. The administration highly values the opportunities for experiential learning that have been gained by the students within the program. 

Whether future AIM classes will be able to bring the cumulative returns up to the level of the passive buy-and-hold benchmark remains to be determined; however, in the same manner as professionally managed investment firms, the AIM students will attempt to generate positive alpha versus the Russell 2000. The students are appreciative of this opportunity that Marquette has afforded them.

Friday, August 11, 2017

10th Annual Ins & Outs of Wall Street - SAVE THE DATE

Join us for the 10th Annual Ins & Outs of Wall Street
Saturday, October 7, 2017

Click here to check out the Marquette's Homecoming & Reunion events happening that weekend

Wednesday, August 9, 2017

What the bond markets are saying about North Korea - Not much according to Dr. Krause

Dr. Krause was interviewed by Sabri Ben-Achour, senior reporter for NPR's Marketplace about the bond market today

Tuesday, August 8, 2017

Flipped Classroom Grant Received by AIM Program

The AIM Program Recently Received a Marquette College of Business Administration Faculty Development Support Grant for a ‘Flipped Classroom’

On July 26, 2017, the dean of  Marquette’s COBA, Brian Till, announced faculty development support awards to various Marquette professors; including Dr. David Krause and the AIM program. The grant submission was for FINA 4320 (the second AIM course which is focused on investment research and valuation). 

Krause wrote that the reason for seeking the grant was to continue to provide relevant curriculum and assessment in an on-line format allowing more time for applied learning and outside speakers during class meeting time. The grant will be received and implemented in the fall 2017 semester.

Dr. Krause stated, “We are thankful for receiving the grant. While we have been employing many variations of the flipped classroom since AIM was created in 2005, it is useful to formalize the process and to receive funding to continue integrating technology into the curriculum. The purpose of this grant is to further the process of working with SS&C Technologies.”

SS&C TechnologiesSS&C Technologies (ticker: SSNC) is the parent company of SS&C Learning Solutions (formerly Zoologic) The firm offers a deep and rich curriculum of the critical subject areas in investments and the financial services industry. Krause added, “SS&C Learning Institute’s courses provide a strong conceptual foundation and work well with the AIM program – we look forward to working with them this semester and beyond.”

The AIM program has been employing active learning techniques the past decade. Experiential learning has been shown to improve the classroom experience, leading to higher student success rates and greater student engagement. 

Krause said, “Flipping a classroom sounds easy, but an effective flip requires careful preparation and the right on-line curriculum. While a flipped classroom puts greater responsibility for learning on the students, the benefit is that it provides them with more room for relevant, applied learning in the classroom. This leads to a shift in priorities, allowing AIM classroom time to move from merely covering material to working toward mastery of it. The ability to bring in outside speakers and to have more student presentations is valuable.”

Monday, August 7, 2017

Let's again debate active vs. passive investing and the impact on the economy

Aug 4, 2017

Mark Gilbert is a Bloomberg Gadfly columnist covering asset management. He previously was a Bloomberg View columnist, and prior to that the London bureau chief for Bloomberg News. He is the author of “Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable.”

Do low-cost index-tracking funds really threaten to turn us all into communists? A year ago, Sanford C. Bernstein & Co. warned that “passive investing is worse than Marxism.” 

Today, the most-read story on Bloomberg is about Paul Singer warning that “passive investing is in danger of devouring capitalism.” 

The giant sucking sound in the fund management industry in recent years is the noise of money flowing to passive products. 

The rise of exchange-traded funds has been relentless, and shows no signs of slowing. 

If anything, the shift to passive strategies is accelerating, as this chart based on data compiled by Bloomberg Intelligence’s Eric Balchunas shows. read on......

Sunday, August 6, 2017

AIM Fixed Income Fund Performance and Key Statistics as of 7/31/2017

AIM Fixed Income Fund Positioned for One More Rate Rise in 2017

Key highlights of the Marquette AIM Fixed Income Fund:

  • Solid short and long-term performance relative to benchmark
  • Short duration strategy in anticipation of one more Fed rate increase
  • Tilt toward corporate credit
  • Low to moderate credit risk (few high yield holdings)
  • Exclusive use of ETFs (since 2005)

(Click on the tables to enlarge)

Thursday, August 3, 2017

The Performance of the Individual Stocks Added to AIM Funds by Students in the Class of 2018

Of the Stocks Added by the Class of 2018 - 8 are up and 5 are down!

Led by (STMP) which rose nearly 30% today on favorable earnings - the AIM Class of 2018 is off to a good start in their role as managers of the Small Cap and International Equity Funds.

Soon after the students return to campus at the end of August, they will again be pitching stocks on Friday afternoons. Every AIM stock pitched since the program's inception in 2005 can be found on the AIM website (AIM student write-ups). This fall all of the students' oral stock pitches and write-ups will be archived and available for viewing on the website. As always, via a web link, everyone is invited to view the AIM pitches real-time - stay tuned for more information at the beginning of the semester.

Stocks Added to the AIM Funds by the Class of 2018
                 (click on the table below for an expanded view)

Tuesday, August 1, 2017

Class of 2018 AIM Fund Performance as of 7/31/2017

Marquette AIM Class of 2018 Off to Solid Start

The AIM students in the Class of 2018 are off to a nice start since they began managing the three portfolios on April 1, 2017. The Small Cap Fund is nearly 300 bps above the benchmarks and the International Equity Fund is matching the S&P ADR Index (it is underperforming largely because of the weaker US Dollar). The AIM Fixed Income Fund is lagging the benchmark as rates have not risen at the level expected by the students.

AIM Funds 4/1/2017 -
Class of 2018 7/31/2017
AIM Small Cap Fund 6.12
Benchmark: Russell 2000 Index 3.22
Benchmark: S&P US Small Cap Index 3.25
AIM International Fund 7.62
Benchmark: Russell Global xUS Index 9.62
Benchmark: S&P ADR Index 7.57
AIM Fixed Income Fund 1.57
Benchmark: BBgBarc US Agg Bond Index 1.88
Benchmark: BBgBarc Aggregate Treasury Index 1.36