Investing in JMU's Future

From: Public Affairs

Senior economics and finance major Justin Quaglia "lives" in Showker Hall. He comfortably roams from room to room on the upper floors, chatting with professors and saying hello to fellow students before landing in Finance Assistant Professor Elias Semaan's office. He will repeat this ritual several times each day. Quaglia is equal parts intense and charming, and since freshman year, he has applied his passion and energy to the Madison Investment Fund, a student-led investment fund that serves as a money manager to the JMU Foundation Inc.

On The Rise

By Shannon Murphy ('11)

James Madison University's Madison Investment Fund (MIF) club members walked through Showker Hall with confidence and big smiles after their success at this year's Redefining Investment Strategy Education Forum in Dayton, Ohio. The group was internationally recognized as the second best student-managed investment fund in the equity value investment category, less than 1 percent behind the winning fund.

The RISE XI Forum, hosted by the University of Dayton from March 31 to April 2, is the largest student investment conference in the world with over 300 universities from around the globe in attendance.

All attending universities were invited to submit a portfolio showcasing their investment philosophy and annual report. These portfolios were reviewed by business professionals and ranked according to investment gain and risk-adjustment analysis.

Eight JMU students represented JMU at this year's conference. These students are current and future portfolio managers for MIF.

Throughout RISE, students attended break-out sessions and listened to business professionals discuss different finance sectors and the fundamentals of life in investing. Students were also encouraged to interact and share their own investment experiences with one another. Open ballrooms and school displays allowed student-to-student interaction to occur.

"The most frequently asked questions we received at the competition this year were 'What class is this for?' and 'Do you get credit for this?' Our team does this because they are passionate about it and want to learn more about investing - we don't do it for credit," said senior Justin Quaglia, Madison Investment Fund president.

The JMU student group was also one of 12 investment funds invited to participate in a presentation to professionals about investment tactics. JMU students discussed their value-based investment strategy and execution of their investment philosophy for 15 minutes. Professionals then asked questions, shared comments and voiced concerns about JMU's strategies. Students were required to explain their decisions and counter all concerns.

"We got grilled," said Quaglia. "Our team handled the questions the best they could and stuck with the decisions that we made."

Students gained real-life experience through attending the event and practiced skills that will set them apart in the future.

"The conference is a wake-up call to students. It shows you what you will do outside of school, the multiple fields that are available and the high-level performance that is expected," Quaglia said.

His dedication to MIF is paying off in big ways. This spring the club was internationally recognized as the second best student-managed investment fund in the equity value investment style category at the annual Redefining Investment Strategy Education Forum sponsored by the University of Dayton. On April 25, Quaglia, as president and finance sector portfolio manager, presented MIF's annual report to the JMU Foundation. Under his leadership, MIF has focused on its values and its fiduciary responsibility to the university. On all accounts the news is very good.

An Elite Group

Quaglia walked into Student Organization Night his freshman year knowing he wanted to get involved. Of the 300 organizations represented that evening, he zeroed in on the Madison Investment Fund. The club is open to all majors and all class years. Typically they receive 60 to 75 applications and accept between five to 12 new members each fall. Quaglia was the only freshman accepted in 2007.

MIF members are students filled with passion, dedication and the intense pressure of being responsible for a portion of the JMU Foundation's portfolio. Quaglia estimates that on average members dedicate 20 hours a week to the club, including during exam week, winter and summer breaks.

Semaan, MIF advisor, says the members are by far the most dedicated and driven students that he has worked with in his career. "The management board practically lives in my office," said Semaan. "It is often hard for me to match their enthusiasm, energy and dedication. They are just phenomenal!"

As president, Quaglia says his hardest job is managing the members' enthusiasm for investing. "I can't exhaust their passion," said Quaglia. His job is to channel that energy into education, research, skill and, the hardest thing to teach, patience.

Value-based Education

The primary initiative of the MIF is to teach members the world of finance through hands-on experience to supplement their classroom learning. The JMU Foundation, MIF's only client, made an initial investment in 1999 with the club. MIF continues to manage a portion of the foundation's portfolio, thus giving its members real-world experience in the logistics of managing an investment fund.

MIF is divided into six sectors with five to seven analysts working under a portfolio manager. Sectors include consumer staples, consumer discretionary, technology, finance, energy and industrials. Within these sectors the students look for new trends and follow MIF's current investments.

Quaglia is quick to point out that the club is not only about managing money. "We focus on professional development, educational development, networking and citizenship as well," he said. The club's leadership has instituted weekly educational forums that have added structure and value to the students' experience.

"The educational aspect follows from the fiduciary one," said Semaan. "Training sessions and formal lectures are presented at a regular basis along with presentations by members and visiting professionals covering the latest technologies and topics in the market and the field."


MIF, like the rest of the investing world, has had a rocky road over the past several years. "We made a lot of changes this year and I believe we are more disciplined, better investors," said Quaglia.

He lists sticking to their value-based portfolio of well-known companies with a solid foundation, concentrating on risk management and making sure stocks correlate with each other and MIF's investment philosophy as the keys to this year's profits.

Their advisor, for one, is very proud of the group. "I am very pleased with the fundís performance for one main reason," said Semaan. "We have an investing philosophy and strategy that are based on our understanding of the fundamentals and that are in line with our fiduciary duties. Our fund is significantly less volatile than the market and yet generates very solid and consistent returns."

Special Thanks

Quaglia is set to graduate on May 7 and, like many of the students who have been a part of MIF, has secured a job with a top investment firm.

Join us to Be the Change

He advises all JMU students to get involved. "Without this organization, my mentors, the people who have helped develop me and are interested in me, I would never have learned the tangible and intangible of the business world," said Quaglia.

The last page of the 56-page annual report offers special thanks to Semaan and others who guide the club throughout the year. However, the very last words are directed to the JMU Foundation: "You have given us an incredible opportunity to take what we learn in the classroom and apply it to a real-world setting, which has allowed all of us to succeed in our classes, in our internships, at our full-time jobs and through the rest of our life."

Published May 2011