Yelena Lyashevskiy was not your typical college student, working for approximately 13 years in the banking industry – and having three children – before returning to school.
When Lyashevskiy resumed her educational career, her plan was to major in accounting and become a CPA. And as part of the coursework, she had to take introductory finance classes.
Her finance professor, Dr. Hunter Holzhauer, was the faculty advisor for a new program just getting started on the UTC campus – the SMILE Fund. Holzhauer encouraged Lyashevskiy to apply for an officer position with the fund, which she did, and she was accepted for a role as vice president of fundamental analysis. “At that time, I barely understood what that meant,” she said.
She quickly came to realize that her participation in the SMILE Fund would be career-changing.
“My involvement in the fund was transformational. It unlocked opportunities for me that seemed mostly unattainable,” said Lyashevskiy, a 2016 UTC College of Business graduate. “My learning curve was ‘J’ shaped, given no financial experience or background, but I loved it and decided to major in finance as well.”
Fast forward just a couple years later, and Lyashevskiy is now a research analyst with Patten and Patten – a Chattanooga investment advisory services firm. Her involvement with the SMILE Fund led to an internship position with Patten and Patten during the summer of 2015 and a full-time job offer after graduation. She has completed Levels 1 and 2 in the Chartered Financial Analyst program – and is currently a Level 3 candidate.
“Needless to say, the SMILE Fund changed my whole career path,” she said. “I would say it was my most important class because of the real life, hands-on experience – and the networking opportunities with professionals in the community. No other class or textbook comes close to comparison. It is the crown jewel of the UTC Business School.”
– – –
In campus years, it might seem like an eternity ago.
But in real time, everything has taken shape over the course of only four school years.
Back in June 2014, wheels were put in motion to add a student-managed investment fund to the UTC environment. Chancellor Steve Angle, the UC Foundation, and several local business leaders knew that this type of program was in place – and thriving – at other campuses. It was time for UTC’s College of Business to offer this program, too.
“We were aware that other schools had it. I know that the University of Tennessee in Knoxville had one or two, actually, and I think that we had a general feeling that it would be good for the students,” said Fred Decosimo, a longtime member of the UC Foundation’s Board of Trustees and a shareholder with the Elliott Davis accounting firm. “The trustees were enthusiastic about starting a program, and it was certainly a team effort to get it cranked up.
“But a lot of the success in getting the thing going has to do with the professor that heads it up.”
Around the same time the decision had been made to bring a student-managed fund to UTC, a new faculty member was on his way to Chattanooga after having served as an assistant professor of finance at Penn State University’s Behrend campus in Erie, Pa.
Hunter Holzhauer, who had experience overseeing his former school’s student-managed fund, came to Chattanooga looking for a different challenge. Truth be told, “I was coming to UTC not thinking I was going to be doing anything with student-managed funds,” he said. “Although I enjoyed it, it was a whole lot of work.”
Truth be told, Part 2, it could be difficult to pick out Holzhauer in a classroom setting. The youthful-looking professor is still in his mid-30s. And it’s not as if he came to town looking to take on extra assignments to keep busy; Hunter and his wife, Mikael, have four children under the age of 7.
But the dean of the College of Business, Robert Dooley, quickly identified Holzhauer as the person to lead UTC’s first student-managed fund. And not long after arriving on campus, Beverly Brockman – Holzhauer’s department chair at the time – pulled him into a meeting and asked him to build a program from scratch.
“As an untenured faculty member, it's probably not the best thing to do to say ‘No’ to the first thing your department chair asks you to do,” Holzhauer said. “So I said I would – but I told her that if I did it I wanted to do it in a different way. Then, that's kind of how we got this idea of running it as a business.”
Holzhauer’s starting the fund from Day 1 “was just a wonderful combination of the right hire in the school of finance, school of business, the discipline of finance,” Decosimo said. “Hunter – and he doesn't take offense to this – but it's so hard to tell the difference between him and the students because he's so young looking. For the students, I think they really identify with him.”
As for Holzhauer’s take on that … it’s good to be a grizzled veteran without looking the part.
“Well, I'll take that as a compliment,” he said. “I'm afraid I'm going to lose all my hair and go straight from puberty to old age and never get to live middle-aged life.”
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During his sophomore year at UTC, Shane Cotriss was in the process of changing his major from nursing to finance when a roommate of his showed him some literature about the SMILE Fund, saying “This sounds like something you would want to do."
After submitting his application, Cotriss “spent every day checking my email waiting to hear back if I was in or not,” he said. “I always had a passion for investing – as I started back in high school – and the SMILE Fund was like that, but so much better.”
Cotriss graduated from UTC in December 2017 with a bachelor’s degree in finance investments. He called being part of the first SMILE Fund team to beat the benchmark and being on the CFA (Chartered Financial Analyst) Investment Research team that made it to the North American finals as his biggest success stories as part of the program.
“The SMILE Fund is like a family where everyone is trying to be their best,” Cotriss said. “With the greatest people in the room thinking, you can get quite a few interesting ideas going back and forth. You end up getting close to all the people in the fund, and it's a very impressive thing to see.
“The SMILE Fund is the utmost important thing to me when I start to think of my future career path.”
– – –
With the new professor on board, the new fund was hatched. Holzhauer was given the latitude to literally put clay in his hands and mold the program the way he wanted to.
As a faculty member at Penn State Erie, Holzhauer’s introduction to this type of program was through his work with the Intrieri Family Student-Managed Fund. “I got Vincent Intrieri to donate $100,000; he's kind of the right-hand man of Carl Icahn on Wall Street and he's from Erie, so that's how we got that connection,” he said. “That was a totally different type of student-managed fund. We ran it out of my class and because of that, there were some continuation problems.
“From my time at Penn State … I didn't realize it at the time, but it was huge that I’d made past mistakes and was able to learn from them. I saw that this project was too complicated to be a project that you would put in the classroom. It had to be a business. It had to be done the right way with all the professional standards, and the students had to embrace that challenge.
“It turns out the way we do it here is tenfold the amount of work that the other way was, but the results are infinitely better. I will say there have been some weeks where I was pushing 100 hours and I was not really sure if I was losing my mind or if I was doing something pretty amazing. These student-managed funds are a little bit like a house of cards when you first start them. If everything doesn't go exactly how you want, it loses a lot of its momentum and then it becomes nothing. I didn't want this to become just another passive fund. I wanted this to be revolutionary as far as how students learn. I knew where I wanted it to be, and it took a lot of time and energy to get it there. I would say there's some real substance, a real foundation to it, and sustainability.”
Upon being tasked to start this new project, one of the first things Holzhauer said he needed to do was come up with a name.
“At Penn State, I got tired of saying the Vince Intrieri Family Student-Managed Investment Fund – and I had to say that every time I talked about that fund. It just became a mouthful,” he said. “So I wanted an acronym that I thought was positive and easy to say. I just put down on paper what I was trying to get across, and it actually came out kind of perfect because of what we do. This is a student-managed investment fund and a learning experience.
“The Student Managed Investment Learning Experience – S-M-I-L-E – was just kind of natural.”
– – –
Roman Mak took over as the SMILE Fund president this past January 1.
When Mak – who expects to graduate from UTC in December 2019 – first joined the fund, he said a lot of the senior members were willing to guide him, provide direction and further his learning experience. Now as president, in turn, he is able to pass on the knowledge his mentors bestowed upon him.
“The SMILE Fund is the single-best opportunity on campus to prepare for a career in finance and – more importantly – to prepare to work in a professional manner,” said Mak, who originally learned about the program through an on-campus flyer. “It will challenge you, but the self-confidence and experience you will gain are well worth it. One day you may find yourself presenting to a roomful of professionals on why the fund should invest a certain way or why you believe that there is a fundamental shift in the markets that need to be considered. It’s an invaluable experience in which you will work with some of the most dedicated students in the College of Business at UTC while interacting with local business professionals and great professors.
“I have no doubt that when I am ready to apply for my first job, I’m going to be much more confident because of my experiences in the SMILE Fund.”
– – –
So what, exactly, is the SMILE Fund?
The SMILE Fund provides select UTC students the opportunity to manage a real stock portfolio for a real client. The real client is the UC Foundation, which officially handed over $250,000 in assets to the fund on July 1, 2015.
The fund was designed to provide its members with a proficient knowledge of portfolio management, investment strategies, and equity valuation techniques. It is to be managed as a typical fund – as if at a real investment firm – and is expected to grow the value of the fund.
From the UC Foundation perspective, the objective is that students get real-world practical education managing money, which in turn will help prepare students for their future careers.
“The Foundation is here to help the university, so we are thrilled when we can see the impact of Foundation dollars,” Decosimo said. “I know the Foundation takes pride if the SMILE Fund students beat their benchmarks, but that's a secondary consideration.”
The plan all along has been for the SMILE Fund to become a nationally recognized fund that enhances the reputation of UTC. SMILE Fund members get the opportunity to attain competitive advantages over their undergraduate peers through direct experience with real markets and research analysis. Throw in presentations and important networking connections, and the members of the fund are multiple steps ahead of non-members when it comes to internship possibilities and job opportunities.
– – –
Being a member of the SMILE Fund enhanced Ben Cheatham’s college experience in many ways – as he traveled the continental United States and met prominent members of the global investments community.
In order to get in front of people like that, Cheatham had to get dressed up and make presentations in front of professionals in his future occupation. Imagine being a 19- or 20- or 21-year-old and being in his shoes, staring out at panelists just salivating to ask him questions.
“It was nothing short of intense the first couple times around,” said Cheatham, a May 2018 graduate who is now working as a public accountant. “The professionals and the professors alike know their stuff, and it is important to know or be aware of anything that could affect the validity of one's report – because fielding questions go hand-in-hand with presenting. In the world of practice, clients may ask tough questions. In the world of academia, they most certainly will ask tough questions.
“I personally believe the dressing-up aspect of presenting was of tremendous value. Knowing how to professionally market my appearance to complement my relevant work allowed me to land great opportunities with internships and ultimately with my public accounting job.”
Cheatham acknowledged that the SMILE Fund is a time commitment – but was ultimately a worthy experience for future program members.
“There will be some days where the work seems endless and progress is slow but the opportunity to learn in the fashion of application outweighs any perceived burdens,” he said. “The SMILE Fund has become increasingly more prestigious, so the addition of a role in the fund to a professional resume is added value to one’s education.”
– – –
If you’re college-educated and you’re in your 40s or 50s or 60s or older, today’s college experience is much different than the university life you remember.
Holzhauer said programs like the SMILE Fund are what universities are supposed to be creating. Students of this generation crave unique learning experiences more than any generation in the past. It’s all about experiential learning – which, simply put, is learning from experience.
“If you put these students in a classroom and you read PowerPoint lectures to them, they will be on their smartphones and won't hear anything that you say,” Holzhauer said. “If you really want to engage this generation, then you need to use experiential learning.
“The SMILE Fund is the best example of experiential learning on campus. It's the real deal. I mean, every part of it is real. Honestly, I think the SMILE Fund is the saving grace for a lot of these students because this is how they learn. Maybe – and I don't want to say they were bored – but they just weren't energized with the standard lecture format of classes. It probably was the SMILE Fund that got them excited and made those classes more relevant, and it gave them a reason to pay more attention in class – if that makes sense.”
Holzhauer said that what makes the SMILE Fund different from student-managed funds at other universities is that it is handled as a business. “One of the unique things that we do here is this is not in a class, this is outside the classroom,” he said. “The students do it pretty much pro bono. I mean, there are a couple benefits that they can get, but for the most part, they're doing it outside of the class.
“Then, we take freshmen – and I'm pretty sure we're the only student-managed fund in the country that does that. Most of these other funds are actually run passively in classes by juniors and seniors or usually, to be honest, by graduate students – so we are a little bit ahead of the curve there.
“We also make the students sign up for three-semester commitments. The reason that's important is … turnover is really what hurts these student-managed funds and makes them so passive. Students can't do much because they don't pass the knowledge from one group to the next. What we do is ... they sign up, we train them their spring semester. Then we kind of take the training wheels off the next fall semester. Then that following spring semester, they train their replacement. They can sign up for multiple groups, so they might go from junior analyst to lead analyst to an officer. We're getting these folks for multiple years – and that's really what makes the difference.”
Holzhauer likes to tell potential participants about what the SMILE Fund can do for them. While there are smaller benefits – such as getting one class credit per semester – fund members learn about how to value a company. “If you can understand how to value a company, then you can use that skill for whatever major that you go into – or for whatever you do down the road,” he said. “For any project you take on for a business, one of the first things people want to know is, ‘How does this add value to the company?’ And I tell students that if you can understand how to find value in a company, you can also understand how to value yourself and what kind of things you can do to make yourself look more valuable to your employer.”
And if you can show your value, you can literally make your own breaks. SMILE Fund members have immediately seen results when it comes to internships and career opportunities. They get to make presentations in front of and network with many Chattanooga-area investment professionals.
“I always tell students it's about creating relationships,” Holzhauer said. “If you want to make a meaningful impact in somebody's life, you have to really get to know them, you have to spend time around them, you have to care about their hopes, their dreams, and you have to invest in them.
“The SMILE Fund is a community that allows faculty like myself and professionals to invest in the students and the students to invest in each other. By doing that, we're taking an unfinished product – meaning freshmen – and we're cultivating them into some tremendous leaders for our community. It's something I didn't envision to take off the way it did. I mean, it's far exceeded my highest expectations. The way the community has rallied around it … it's very inspiring. The students have created a sense of community and family of their own and it makes me happy to go to work every day because I know we're doing the right thing.”
So … how does one become a member of the SMILE Fund community?
Even if you’re a first-semester freshman with limited classroom experience under your belt, the application process begins in the fall. Interviews usually start in October, “and then I'll usually let them come to a meeting in November just to give them an idea of what's in store for them,” Holzhauer said. “We have a very rigorous application and interview process and I think for some of the students that can be pretty exciting and maybe a little scary, too. We do interviews by panels of faculty and former SMILE Fund students.”
Newly minted members officially start in January at the start of their second semester.
“They come in and they haven't had any finance classes yet. In fact, a lot of them won't take a finance class until their junior year, so I'm basically teaching them finance and it's trial by fire,” said Holzhauer, who immediately starts out the newbies with a series of boot camps. “We did seven workshops this year in our boot camp where we brought in different people – including a Bloomberg rep from New York who flew down to teach the kids how to use Bloomberg. One of the things they do is get Bloomberg certified so they can learn how to use the Bloomberg software – which is the most advanced investment software in the world.”
While the number of members has grown since the SMILE Fund’s initial start, Holzhauer has capped the program for the foreseeable future at 47. “Mainly because of fire code restrictions,” he said with a laugh.
“The reason we're at 47 is we have seven officers and … there are really 10 traditional sectors in the market,” he said. “We have a lead analyst for each sector. We have another lead analyst within those sectors for a specific sub-sector so that we get more coverage within those sectors. Then, we have two junior analysts for each sector. So there is a team of four for each sector – and that's where you get the 40 analysts from.”
Holzhauer does find himself in the unenviable position of having to fire-and-hire as the school year goes on.
“Part of my stump speech, too, is that I usually let the folks know the way that we do things here is different,” he said. “I mentioned the freshmen, but the business part is real, too. I mean, we've got professional standards. In fact, we want to be one of the first – if not the first – student-managed fund to be GIPS (Global Investment Performance Standards) certified. We have some very high standards, so we hire and we fire. I average firing about six students a semester.
“I know that sounds like a lot, but I usually can have a conversation with them and tell them what the expectations are – and we decide whether or not they have the time. A lot of times we get a first-generation student – someone who has to work a lot to pay for school – so sometimes it's more of a time situation. We just decide that from a time commitment they can't stay within the SMILE Fund.”
For the majority who do survive the initial entry into the program, they do need to reapply each year. But if you’re already in, “it's more of a conversation with me instead of a formal application process,” Holzhauer said. “We sit down and we talk about what your career goals are – and what you really want to get out of it. I don't like to let them just stay in the same position … you either need to go up a position or you need to get out. You can climb up the ranks depending on what your commitment level is.”
– – –
Michael Swanson has been able to bask in the glory of what the SMILE Fund has become.
One of the initial group of students in the fund, Swanson – who said he joined to get more experience, but ended up getting much more than that – has watched with pride as the program “has turned into something exceptional on a national scale.”
“The SMILE Fund is the single-best organization in the College of Business,” said Swanson. “It provides students of all majors an opportunity to take what they are learning in school and apply it to something real. In some cases, students learn skills before they are taught in class – and the classes have started to become more advanced in response. If you take your position seriously, you will gain valuable experience that will set you apart from your peers in the job market and give you the opportunity to make valuable connections in the industry.”
One of those connections to local professionals helped him land a job at ACA Performance Services in Chattanooga.
“I was part of the founding group of students, so the fund did not have the reputation it has today,” said Swanson, who graduated from UTC in 2016. “I think we had an amazing group of students that had the drive to create something beyond what was envisioned.
“I think I did a lot of good work for the fund in its beginnings and planted good roots for those to come. Some of my ideas are still being used, others are not, but I don't feel like I can take credit for any of it. I simply did my best to elevate those around me and the fund as an organization, and I was one of many who did the same.”
– – –
Everything hasn’t always been smooth sailing. In fact, the SMILE Fund’s maiden voyage put anything but a smile on the faces of its members.
After months of planning and putting together the inaugural group of officers and analysts, Holzhauer and the SMILE Fund members went to work in late-summer of 2015 with the assets bestowed upon them by the UC Foundation. Initially, the members did OK – actually beating the benchmark for 2015.
But then came January 2016.
“The students decided to get a little bit riskier, and they picked the very worst month to do it,” Holzhauer said. A long bull market had come to a screeching halt. “Usually, Januaries are a good overall return month; it's called the January Effect for the market. But this was what I call a Reverse January Effect; it was horrible and we did awful. We got slaughtered that first quarter of 2016, and we learned a long, large lesson.
“Our mistakes – because we're dealing with undergraduate students – tend to be big mistakes, so one of the things we do in risk management is we try to avoid as many potholes as we can.”
Were his students afraid that the UC Foundation was going to shut them down and take back the money?
“It was really interesting,” Holzhauer recalled. “I do think the students were worried because we lost $20,000-$30,000 really quickly. The one thing that I liked that they did is … the officers and some of the lead analysts got together, sat down, and they kind of hashed out some of their concerns. There was some maturity there when they said we're not going to make this mistake worse. They decided, ‘We're not going to make any trades. We're going to wait. We're going to ride this out.’ They believed in their stocks. It was just poor timing.
“They waited and they waited and they didn't make any trades that whole quarter. By about the time that quarter ended, most of those positions had come back. There was some real maturity on their part – and it probably is my favorite story to tell because it's really easy to talk about successes. When you talk about how you handle adversity, that's the measure of real maturity and real leadership. I think the comeback story wouldn't have happened if it wasn't for the slump, so I'm kind of happy the slump happened.”
Experiential learning includes life’s teachable moments. Obviously, Holzhauer can refer to that story time and time again as a reminder to his students.
“Absolutely,” he said. “When they first join the fund, the students are naïve. I mean, they have to be. They've had limited time to learn things, so there's going to be a lot of things they don't know. As long as they understand that and play to their strengths, then you can really do some things.
“We focus a lot more on risk management now than we do on returns. That first group was all about returns; they just didn't have the process or the emphasis in place to give risk management its due diligence. We hit a couple potholes, but they also picked some phenomenal stocks that first year, too.”
– – –
Stephen Zurlo was searching for an opportunity to explore investments and learn more about the world of finance when he heard about the SMILE Fund during a first-year business seminar. He decided to check it out.
“I would say that the experience provided by the SMILE Fund has been of paramount importance in helping me to prepare for my future career,” said Zurlo, who expects to graduate from UTC in 2020. “I have learned a great deal about equity analysis and portfolio management and this has led me to get an excellent internship and put me well ahead of my non-SMILE Fund peers. Being a member of the SMILE Fund is perhaps the single best and most valuable part of my entire college experience at UTC.”
The SMILE Fund was a logical step on Zurlo’s career path. In high school, he was the president of his school's Future Business Leaders of America chapter as well as the manager of the student-based enterprise for his school's DECA chapter.
Zurlo took great pride in working to help develop the analysts in the SMILE Fund over the past year as one of the fund’s officers. He is currently the SMILE Fund’s vice president of fundamental analysis, taking over the role during the 2017-2018 school year.
“I took the time to meet individually with each analyst and walk them through what they can do to improve on an individual level,” he said. “After doing this, I have seen a vast improvement in the overall quality of stock reports and analysis done by the vast majority of our analysts.
“I was able to learn a great deal from the older students who helped me when I first joined as a freshman, and I worked very hard to apply the knowledge that they passed down to me. I now feel much more confident in my own ability to not only do analyst work but to guide new analysts to grow and succeed.”
– – –
Certainly, the success of the fund can be seen in actual results – and the SMILE Fund has continually beaten its benchmarks.
Three different presidents – Nic Bullard, Dillon Martin, and Hunter Carroll – have sat atop the SMILE Fund when it outperformed the S&P 500. “We have two goals … we want to average over 7% a year in total return and we want to beat the benchmark by 1% each year,” Holzhauer said. “They're doing great with a 9% return each year on average. I think it's over 30% return in total, so we're meeting all the goals that have been set – and they're getting better. Their performance is getting better at both picking sectors and picking stocks. I'm impressed. They do some phenomenal research, and it's actually at a higher level than I was expecting it to be at this point.”
What truly is amazing about the SMILE Fund’s accomplishments is that these triumphs are taking place solely with undergraduate members.
“There are hundreds of these student-managed funds,” Holzhauer said, “and there's probably a student-managed fund in every big Power Five school and a lot of other schools that are close to our size. But I've done research on student-managed funds, and there's only maybe one or two in the country that are doing things similar to the way that we're doing it. Part of that is how early we take them, the relationships that we build with these students, and the professionals.
“The time and energy the professionals put into this is just incredible. They really enjoy pushing these students and asking difficult questions, and they get shocked when the students can answer them.”
Holzhauer was quick to heap praise on several people, most notably Dr. Bento Lobo, UTC’s department head of finance and economics; Ray Ryan, president and portfolio manager of the Patten and Patten investment firm; and Dr. Bryan Rowland, UTC’s vice chancellor for development and alumni affairs and executive director of the UC Foundation.
“Bryan has helped me a lot on the logistics side with the UC Foundation,” he said, “and Dr. Lobo and Ray Ryan have been the two biggest contributors to the SMILE Fund success. I like to say that they play bad cop for me so that I can play good cop. I can play my fair share of bad cop, but it's a little bit ... it's not my natural best skill. I only like to break it out when I really need to and the students know I mean business.
“I like to be more of an encouraging type of professor, but Dr. Lobo and Ray Ryan ask those really tough questions in presentations that startle the students and make sure that they know that they have to come in with their stuff done. I mean, it's that kind of support that has helped this get to a higher level because this is definitely a team thing.
“I'm thrilled that I started it, but there are probably 20 different people that play a role in the SMILE Fund at UTC. Everybody's always pushing it, and I can't tell you how much support I've gotten within the community here at UTC. It's pretty phenomenal. As much as the students inspire me, it also feels like I have a lot of colleagues and folks that are always there for me, too. That keeps me motivated.”
While Holzhauer and his colleagues can help shape the students, SMILE Fund’s members get to compare their skills to other college student-managed fund groups. It’s in that setting that the relative youngsters from UTC have shown off their talents and competed against mostly older collegians.
“The last few years, I’ve taken my five best analysts to the CFA Investment Research Challenge,” Holzhauer said. The CFA – which stands for Chartered Financial Analyst – Institute Research Challenge is an annual global competition that provides university students with hands-on mentoring and intensive training in financial analysis. Student teams work to research and analyze a publicly traded company; write a research report highlighted by a buy, sell, or hold recommendation; and then present and defend their findings to a panel of industry experts.
“Our first year, we came in second by one point – a photo finish. We lost to the graduate team from Belmont, and we're all undergraduates,” he said. “The next year, we won at the regional level – it's called the Greater Tennessee Regional. We then went to the North and South Americas Competition in Seattle; we didn't win, but we learned a good deal from it.
“This year, the team we took won regionals again. We went to the North and South Americas Competition in Boston, and we made it to the final group.”
The 2018 UTC squad – the only all-undergraduate team to advance to the Americas Regional finals – was comprised of Hunter Carroll, Shane Cotriss, Andrew Cox, Heather Edde, and Kimberly Guo.
UTC squared off against Jacksonville University, Marquette University, Tufts University, and Universidad del Pacifico (located in Lima, Peru) in the Americas finals. Jacksonville advanced to the Global finals in Kuala Lumpur, Malaysia.
“This is a competition that has over 1,000 different universities participating from over 80 different countries,” Holzhauer said. “This is our Olympics as far as investments go. We are ascending the ranks pretty quickly as far as recognition is concerned.”
– – –
Isabella Loza-Ortiz spent four years as a member of UTC’s women’s golf team. She competed in 43 tournaments – one of the highest totals in school history – and was a three-time Women’s Golf Coaches Association all-American scholar.
Loza-Ortiz also came to Chattanooga to study finance, and it was during a finance course that she first learned about the SMILE Fund – which went on to play a crucial role in shaping her career.
“As a student-athlete, I did not have free time to explore internship opportunities either during the school year or the summer,” said Loza-Ortiz, who graduated from UTC in December 2016. “Therefore, I decided to join the SMILE Fund as a way to get experience and start building my resume. I had my first-ever finance class with Dr. Holzhauer, and towards the end of the semester, he mentioned he would be starting an investment fund the following semester. This is when I made the decision to apply and give it a try.
“Given that I was part of the initial funding team, we were not mentored by previous students – but we did have the opportunity to mentor the incoming group and to be mentored by professionals such as Ray Ryan and Dr. Bento Lobo. I believe as the initial group, it took a lot of trial-and-error – but we learned the best way by throwing ourselves out there.
“As a student-athlete, I had a community within the golf team. And the SMILE Fund became a community for me within the College of Business. This opportunity allowed me to learn from great individuals and build professional relationships with professors and advisors. Furthermore, it allowed me to connect what I was learning in class to real live investments. It incentivized my curiosity and provided the tools for me to become an analyst.”
– – –
As the SMILE Fund continues to build up steam, it becomes one more story to tell in selling the virtues of UTC to prospective students, donors, and alumni. And the word-of-mouth about the program is growing and growing.
One telling sign about the success of the burgeoning program took place about a year ago when Holzhauer began fielding phone calls and emails from high school seniors wanting to know what their chances were that they could become SMILE Fund members.
“I told them the real world is so much more about fit and about hard work,” he said. “I don't want to make a bunch of kids do a bunch of stuff they don't want to do, and that's a hard conversation to have with high school seniors because most of them don't know what they want to do.”
When high school seniors are considering coming to your university for a one-credit out-of-the-classroom course, that’s very significant. It’s moments like those when Holzhauer can sense just how fast this program has grown in such a short time. He was asked when he knew that the fund was going to be a success.
“When did I know? I think it came in the opinions of Bento Lobo and Ray Ryan,” he said. “When their initial feedback was so strong – that they were so shocked at how far we'd gotten and how fast we were getting there, and that they kept telling different people about the SMILE Fund – it surprised me.
“I knew we were a success when we kept getting asked to do presentations. We've probably made 30 presentations to different groups on campus and in the community. I mean, we're talking upscale, professional presentations – and whether it's the Rotary Club or the UTC Board or the UT Board or the UT Alumni Association or the UTC Alumni Association or the Dean’s Advisory Board, whatever group it is – the fact that you're getting asked and you know nobody else is getting asked is telling you something pretty significant right there.”
By getting the students in front of so many established local business leaders, the SMILE Fund is providing them with an invaluable opportunity.
“It's the best thing for Chattanooga because Chattanooga deserves to keep its best and brightest minds in town,” Holzhauer said. “The students get to do that through their presentation opportunities. It sets a standard for the College of Business, for the department, for the university.
“Every year we get more and more connected into the city of Chattanooga, and we connect with more partners.”
Holzhauer pointed out that ACA recently employed several former SMILE Fund students – and the company has decided to make a financial contribution to UTC. He also mentioned some of the landing spots of other SMILE Fund participants – including Patten and Patten, the Patten Group, Barnett & Company, UBS, Merrill Lynch, Unum, the Tennessee Valley Authority and TDA Insurance Agency.
“We're spreading ourselves out pretty quickly throughout Chattanooga and the state – and even Atlanta,” Holzhauer said. “As the folks get down there, or down to those places and internships come open, they will tell their employers, ‘You want to hire from the SMILE Fund.’ We've already seen that start happening. It's going to become an even bigger deal than it already is right now.”
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Go ahead and ask Dillon Martin to talk about the SMILE Fund. See if you can detect the enthusiasm as he reflects upon his time in the program.
“Without the SMILE Fund I would not have been hired at Merrill Lynch,” said Martin, a 2017 UTC graduate. “Not only did my involvement in the fund lead me to presenting to the man who hired me, but the real-world experience allowed me to be exposed to portfolio management, public speaking, dealing with investors, and managing a team. Though the classwork is important for understanding the fundamentals of finance and investments, I could not have had such a well-rounded understanding of wealth management and finance had I simply done the classwork.
“The SMILE Fund is a real job that requires significant time management to be able to focus the majority of your time on the fund and still manage to excel in class. Fortunately, it all applies, so more time spent in the investment fund leads to an easier time understanding the classwork. The SMILE Fund creates a feeling of responsibility and purpose for the students involved and allowed us to graduate with a maturity and confidence that is unparalleled throughout the campus.”
Martin said his academic evolution was quite dramatic after joining the SMILE Fund.
“At first, I was an intimidated recluse who was filled with self-doubt after seeing how well the upperclassmen had grasped their individual roles,” he said. “At that point, my options were to allow the intimidation to continue to limit me or to attack the challenge head on and try to fill the shoes of the group that preceded me. Fortunately, with the guidance of Dr. Holzhauer, I opted to strive for excellence. This was done by immersion into the invisible world of finance and by observing the language and demeanor of those who seemed to have it figured out.
“The more experienced SMILE Fund students mentored the new students by treating them as equal members of the team and never spoke differently to us simply because of our lack of experience. By using their appropriately advanced finance lingo, we quickly picked it up and began using terms or having ideas that were completely foreign to us prior to entering the fund. As those older members left and we took over control, the seamless transition allowed us to maintain the momentum and further develop the structure of the fund. As I approached graduation, it became very easy to notice when a student was confused or in need of guidance. We were accustomed to helping them because the young members are always recognized to be the future of the fund.”
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Back in its infancy stages, the UC Foundation started the SMILE Fund to give students some real-life hands-on fund management experience.
With minimal hiccups along the way – and a lot of success stories – the SMILE Fund continues to perform at a high level.
“From the Foundation standpoint, we felt very confident that the $250,000 we entrusted to students would be well managed, and that they would have a keen sense of a fiduciary responsibility to the school,” said Decosimo, a longtime member of the UC Foundation board of trustees. “I think there's a general feeling among many of the trustees – if not all – that we want to help grow that fund to be larger.
“I think what says more about the Foundation's enthusiasm for it is the general sense that we want to be able to grow it more – and if that takes additional Foundation money, I'm fairly certain that can be achieved. If we can use Foundation money to attract additional contributions from the community to the fund itself … that would be great, too.”
So, what does Holzhauer think is the right number moving forward? He said that a $1 million grant was his original thought – and that figure is still his goal for the fund.
“Simply from an operational standpoint, when you're making trades it makes more sense to be trading at bigger numbers for the amount of research that the kids are doing,” he said. “We have done more with our $250,000 than a lot of funds that have $5-$10 million in them. We're doing a lot more. We should be at least approaching the same territory as far as assets under management – because some of it is a mode of recruiting and marketing.
“I do think if we keep beating the other folks managing the Foundation's money … that they may want to give us more money.”
Holzhauer does acknowledge the importance of not just meeting benchmarks – but exceeding them – saying, “I just think it helps to tell our story. I mean, to me it's better to be right. I guess it's better to be wrong for the right reason than right for the wrong reason, so it's better for me that we're doing things the right way. What happens will happen, but over time if you do things the right way, it tends to work out for you.
“There's going to be moments … there will be another January 2016 at some point. I don't know when it will happen or what the story behind it will be, but we've got a process in place for how we handle those situations. If these students are still doing what they're doing now and putting the time and energy that they're putting into it, then it will be a net positive in the long run.”
And to think, it has all come together since the summer of 2014 … when a decision was made to start a student-managed fund … and the professor putting it all together hadn’t even arrived on campus.
“I can't underestimate the contribution that Hunter has had. The time that he puts in, and the time that the students put in … it is very demanding,” Decosimo said. “And then you get to see the enthusiasm of these students and their levels of participation and commitment.”
The SMILE Fund has taken on a life of its own. Holzhauer said not to give him all the credit “because I certainly didn't do it all,” but it is pretty impressive how everything has come together over such as short period of time.
“The fund is transforming our Finance Department and our College of Business because the other professors and faculty are seeing and hearing the stories that these students have,” he said. “It's pretty inspiring and I have to admit … it's the best thing I do as far as my job is concerned.
“I would like to say that my research is having the same kind of impact or even my teaching in the classroom, but it's the teaching in the SMILE Fund and working with these kids and giving them this kind of an experience that is probably going to be the biggest impact I give during my professional career.”
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When he first arrived at UTC, 2018 graduate Hunter Carroll was a part of the College of Business’ BUSINESS LLC – a “Living and Learning Community” for a select group of incoming business freshmen. Shortly after the school year began, he told an instructor that he was interested in investments. The SMILE Fund had recently started, and “she took me aside before class to tell me about the opportunity and that I should apply.
“It was great starting as a freshman and staying in through my senior year,” Carroll said. “I came in as a lead analyst, but not knowing very much about the stock market. My knowledge was limited to what I had read in my senior year of high school and first semester of freshman year – primarily websites and some books. I immediately tried to form bonds with the officer group, since they were the next step above me. They helped me tremendously by sharing their knowledge. It was really rewarding the next two years – as vice president of sector analysis and president and chief investment strategist – to give back and help other students as the officers had helped me the year or two before.
“It's really nice to see other students' faces light up when you help them and they understand something they had previously been confused about.”
Carroll said being a member of the SMILE Fund was extremely important in preparing him for a future career – not only from the investment side but in the areas of social skills, public speaking, and leadership.
“I learned so much more by being in the SMILE Fund than what I would have from just a textbook,” Carroll said. “It really takes what you learn in a textbook and applies it to the real world. The SMILE Fund was the thing I enjoyed most when it came to college.”