By: Azl Saeed ~Staff Writer~
Unlike most classes one might encounter at Xavier, the D’Artagnan Capital Fund (DCF) offers a hands-on experience for students to manage a portion of the university’s money.
Previously known as Xavier Student Equity Investment Fund, DCF consists of an actively managed opportunities fund that manages $2.3 million of the university’s endowment. According to the DCF website, it “values large cap equities within the S&P 500, utilizing a bottom-up approach.” What makes this fund unique compared to others in the community is that it is run completely by students. In order to join the fund, students must have completed ACCT 200, as well as FINC 300. In order to become an analyst, students must then enroll in FINC 390 and receive a B or higher.
In order to become a manager, students must then receive a B or higher in FINC 490.
The DCF itself counts as a class for three credit hours. Currently, the team consists of ten managers in addition to 28 analysts.
Through extensive research of company financials, management and industry competitors, analysts are able to make investment decisions. Currently, the fund manages a portfolio of 40 holdings. Some of these current holdings include Macy’s, Time Warner Cable, Walmart, Apple and Google.
In its annual performance report for 2011, DCF reported a gross total return of 13.48 percent. In that same year, S&P 500 reported a total return of 15.65 percent. This means that DCF underperformed the benchmark in that year.
In 2012, DCF outperformed the S&P 500 Index of 8.54 percent return with 8.64 percent. During the next fiscal year, DCF underperformed by 595 basis points.
Its most recent report is its semi-annual fund performance from April 1, 2015—Sept. 30, 2015. During this time, DCF had a return of -6.49 percent in comparison to the -6.18 percent return of the S&P 500. However, according to its systematic risk metric, DCF outperformed the benchmark. Therefore, on a risk adjusted basis, the fund outperformed the S&P 500.
In terms of the future, DCF hopes to take advantage of the auto and computer industry. This stems from its belief that the auto industry will benefit from the price drop of oil.
Companies like Tesla Motors Inc. or General Motors would be a preferred addition to its holdings. DCF additionally values companies like Netflix and Time Warner as their sales are a reflection of consumer confidence.
While the market anticipates an increase in interest rates, the fund sees potential in homebuilding companies because it has less exposure to the volatile nature of the global economy.
To learn more about the D’Artagnan Capital Fund, visit www. xavier.edu/williams/equity-fund/ .