Cash Sits On the Couch, Not Working

April 28, 2020

Hello everyone! The CSUF Student Managed Investment Fund is back with an update for the month of March. We hope that everyone is staying safe and adjusting well to the new work-from-home environment!

 

We would be more than happy to answer any questions you may have at csufsmifca@gmail.com!

 

Overall Portfolio

 

 

The CSUF SMIF portfolio underperformed the benchmark by -6.68% in the month of March. Our portfolio had a very rough time during March. The lion share of that underperformance can be attributed to our significant cash balance. During the last week of March, the S&P 500 rose approximately 15.52% from its 6-month low. As our team had been reassessing sold positions and researching potential ones, the portfolio could not benefit from the market's rally.

 

Equity

 

 

The SMIF equity portfolio underperformed the benchmark by -7.10% in the month of March. As previously discussed, our cash balance hurt our portfolio's performance. This hit our equity portfolio the most since most of the positions had been stopped out. In fact, we are omitting our normally included 'Leaders & Laggards' section this month since it would not be as helpful with so few positions.

 

By the end of March, our equity portfolio only owned direct positions in Bank of America (BAC), Costco (COST), and Waste Management (WM). We also owned shares of the iShares Aerospace and Defense ETF (ITA). Lastly, we owned shares of the Russell 1000 Value (IWD) and Growth (VONG) Indexes.

 

Fixed Income

 

 

The SMIF fixed income portfolio underperformed the benchmark by -6.17% in the month of March. Our fixed income portfolio suffered because of our overweight in non-US bonds while COVID-19 ravaged economies across the world. The effects of the virus on emerging markets was likely more pronounced than it was in more developed economies. As a result, our position in the Columbia EM Bond Fund (REBAX) had the greatest impact on our performance. The Thompson Bond Fund (THOPX) was also hit hard as it is mostly composed of BBB corporate bonds.

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