Starting at $7 million in 2003, the SIAS Fund has grown to over $10 million after years of hard work by SFU’s GAWM and MFRM students. On February 21st 2011, the fund hit a record high with over $10.80 million under management, which ranks itself as the largest student managed fund in Canada and one of the largest in North America. As a MFRM candidate and an analyst in the SIAS Fund’s Compliance and Performance team, I would like to share with you some key data that highlights the fund performance in 2010.
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 teams 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 advantage of understanding risk, is realizing how much risk we are taking on for the return that we expect to realize. We aim to minimize the risk and maximize return at optimal levels. The Risk Metrics team are key in understanding.
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. For more information, please visit our website at http://beedie.sfu.ca/sias/. You are more than welcome to leave a comment or question, I am happy to respond or answer any that you have.