Summit Student Investment Fund >  Investment Policy

The Student Investment Program has developed an Investment Policy for the Fund. In order to maintain an efficient risk/return profile and for the purpose of setting objectives and guidelines for different segments of the diversified portfolio, the Fund assets are structured in portions described as asset classes. The allocation of assets is achieved through the prudent diversification of the asset classes listed below:

1. Equity portion—investments in US common stocks, ADRs, other securities that are convertible into common stock and funds containing these securities. Equity funds could be separated into a core growth fund and an aggressive growth fund.

2. Cash equivalent portion—primarily highly liquid, short-term securities and funds containing these securities.

Within the equity portion, the core growth fund includes stocks from a diversified set of domestic industries that have been highly ranked by professional investment advisory firms that meet other selection criteria. This allows the fund management to invest in well-managed businesses. Through a combination of detailed company analysis and state-of-the-art portfolio modeling, the fund’s management endeavors to outperform the S&P 500 index. This is typically 50-75% or the portfolio.

The aggressive growth portion is limited to no more than 10-25% of the total assets. These stocks are strictly screened to meet criteria that would be appropriate for aggressive growth stocks. This portion of the Fund attempts to outperform the Russell 2000 index.

The cash equivalent portion would typically be less than 10% of the total assets. This would include high quality liquid, short-term securities such as Treasury bills, notes, and bonds or high quality certificates of deposit in federally insured institutions. The cash equivalents are used primarily for “parking” funds before investments are made.

The fund has adopted a long-term investment strategy where potential firms are carefully researched, with a view to maintaining an investment in the company for approximately 3-5 years. While this strategy allows the management to minimize the number of transactions made (and their associated costs), it means that an especially thorough analysis is required.