The 2023 SMILE Fund Chartered Financial Analyst Institute Research Challenge team, from left: Claire Hoeke, Jacob Barber, faculty advisor Hunter Holzhauer, Grant Fetters and Nick Morris (photo courtesy of Hunter Holzhauer).
The suspense, according to Claire Hoeke, was a tad unnerving.
Hoeke and three of her University of Tennessee at Chattanooga SMILE Fund (Student Managed Investment Learning Experience) teammates, Jacob Barber, Grant Fetters and Nick Morris, were participating in the Chartered Financial Analyst Institute Greater Tennessee Research Challenge—and waiting on the announcement of the winning group.
“We were also competing against UTK,” she explained, “and he said University of Tennessee and took a long pause. We were like, ‘Either he’s finishing the sentence with us, or he’s done and we’re all sad.’
“He was really building that suspense. Then he said, ‘Chattanooga.’”
With that proclamation, the SMILE Fund team took home top honors in the Greater Tennessee Research Challenge for a seventh consecutive year.
The CFA Institute Research Challenge is an annual equity research global competition that provides hands-on mentoring and intense training in financial analysis and professional ethics. University teams, typically comprised of graduate students—as opposed to the UTC all-undergrad squad—analyze a company’s financial health, document it in a professional research report and submit findings to a panel of judges.
This year’s SMILE Fund team of Gary W. Rollins College of Business students will now compete in the sub-regional round. Winning groups from the local competitions across the Southeast will produce recorded videos for a different set of judges.
Teams advancing from the sub-regionals to the regional semifinals will be announced at the end of March.
“This is first and foremost a victory for these four students,” said Dr. Hunter Holzhauer, a Robert L. Maclellan and UC Foundation associate professor of finance and director of the SMILE Fund. “I choose the best students to be in the SMILE Fund. I then choose the best SMILE Fund students to be on our CFA Research Challenge team. I call it the Nerd Olympics for a reason.
“That said, these students did not win on pure talent. They won this competition by working hard. There were a lot of long nights in the Bloomberg Lab that turned into long mornings. The last two months have been very time-intensive. The competition spans two semesters and they have each invested hundreds of hours at this point. Not one of them has complained. I was extremely impressed with their dedication.”
Hoeke, a junior majoring in finance (investments track) from Greeneville, Tennessee, is vice president of operations for the SMILE Fund and one of the organization’s chief analysts. She also works part-time at Patten and Patten, Inc., a Chattanooga investment advising firm.
“I think the ability to work in the SMILE Fund set us up for the CFA,” she said. “Working with the CFA Challenge, you get exposure to Ray Ryan, who is our industry mentor and the CEO of Patten and Patten. It just sets you up for success.”
Holzhauer said Ryan knows how to challenge the students and encourage them to be better analysts.
“His wealth of industry experience and his penchant for demanding quality have been catalysts for the SMILE Fund students and the CFA Research Challenge students for nearly a decade,” Holzhauer said. “I have watched as countless students under Ray’s tutelage have grown to not only become better-educated analysts but also become more mentally tough and—as we say in the RCOB—real-world ready.”
From left: Jacob Barber, Grant Fetters, Claire Hoeke and Nick Morris (photo courtesy of Hunter Holzhauer).
The four SMILE Fund members analyzed HCA Healthcare (NYSE: HCA), a Nashville-based for-profit operator of health care facilities.
“The way it works is each region is given a specific company and everyone researches it. The judges all have insights into that company,” explained Barber, a senior majoring in finance (investments track) and the SMILE Fund’s chief health care analyst.
“It just worked out that HCA is a health care company and I was already working on things in the health care industry. It was very helpful because I already knew some of the metrics that hospital companies and others in the health care space were getting measured by.”
A graduate of Hixson High School, he initially went to the University of Alabama at Birmingham as a pre-med major. Barber said after realizing that was not the career he wanted to pursue, he took some time to figure things out before landing at UTC to focus on an investment path.
“I really had no idea about the SMILE Fund until my third semester here,” he said.
Barber has since landed an internship at Patton Albertson & Miller, an independent financial life management firm.
“I found out how incredible the SMILE Fund is and how impactful it can be for your future career,” he continued. “It was honestly very lucky for me.”
Fetters, a native of Mt. Juliet, Tennessee, is pursuing majors in both accounting and finance. He said taking classes in both disciplines gave him a unique perspective.
“Nick being an accounting major, we could bounce ideas off of each other from the accounting side, and I could talk to Claire and Jacob about the finance side,” said Fetters, the SMILE Fund’s lead analyst in the consumer discretionary sector. “It’s been great being able to have the opportunity to work with my fellow students, go in the Bloomberg Lab and throw ideas off of each other.
“We got it to where our paper and presentation sounded in one voice, and that collaborative work helped a lot. We all had different thoughts and ideas of what we thought about the company and merged all of them together.”
Fetters said he likes being a double major because it gives him career choices down the road.
“If I want to focus completely on finance, I have the opportunity to do that,” he said, “and with the economy, who knows if I could get a job in finance post-graduation. Accounting has job security, so doing both allows me to maneuver.
“Being a double major creates a clearer picture and provides a bridge in both fields.”
Morris, a junior accounting major from Alpharetta, Georgia, joined the SMILE Fund for the spring 2022 semester. He remembered his early days with the group and thinking, “No way,” while watching last year’s winning CFA team of Luke Johnson, Nicole Brill and Logan W.E. Painter analyze Tractor Supply Company.
“Coming into this past fall semester, I wasn’t originally one of the students Dr. H had pulled to be on the team. However, one student dropped out and I got my opportunity,” Morris said. “I knew from watching last year’s Tractor Supply team that the reason UTC wins this thing is that we’ve got a process where we just outwork all the other teams.
“Right before the report was due and before our presentation, we’d be up in the lab until midnight, 1 a.m., just finalizing everything and making sure that our arguments were solid.”
Morris said an advantage SMILE Fund students have is the opportunity to present at investment strategy meetings before finance department faculty and area business experts.
“Presenting in front of industry professionals, there’s an intimidation factor to it,” he said, “but that is the reason we worked so hard to make sure that we were correct and our arguments were solid.”
He said College of Business faculty members told the group that winning wasn’t the most important thing—even though the team had won six years in a row.
“We were told, ‘The most important thing was that we go out there and work hard and deliver a great product,’” Morris related, “but I’m sure the other students will say this as well: We felt pressure to keep the streak alive. When they announced that we had won, there was definitely a feeling of relief. We’re not the ones that broke the streak; we got it done.”
Added Barber, “This is such a prestigious event and competition to be a part of, so there’s pressure from that. But we also put a little pressure on ourselves because we wanted to continue that streak. Having been a part of the team that was able to continue that streak and make it seven years in a row, there aren’t words to describe how happy we were once we heard the news.”
