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SIM Fund grows endowment — and the students it serves

December 14, 2017

ASU’s student-led portfolio management program offers practical experience alongside investment professionals

Endowed funds are an important source of revenue for the long-term health of Arizona State University’s research, teaching and learning activities, but their returns are not just monetary: Each year, about 30 students gain rigorous, hands-on experience analyzing and managing a small percentage of ASU’s endowment assets as part of the Student Investment Management (SIM) Fund.

On Dec. 1, those undergraduates and master’s in business administration candidates presented their initial portfolio recommendations to investment professionals — including experts in the community, members of ASU Enterprise Partners’ Investment Committee and representatives from its outsourced chief investment officer, BlackRock Inc.

“The level of sophistication students are bringing to security analysis and portfolio construction is phenomenal. It reflects the investment depth of ASU’s SIM Fund program,” said Suzanne Peck, head of endowments and foundations at BlackRock. The firm will provide portfolio insights to students in the program as part of its new partnership with ASU. “The other thing that stood out was the quality of the oral presentations — in addition to portfolio management skills, it’s clear they’re gaining marketing skills, too.”

The SIM Fund was established in 1996 by ASU’s W. P. Carey School of Business’ Department of Finance and has evolved to meet the demands of the industry. After returning to ASU from two years navigating the financial crisis at Dimensional Fund Advisors, SIM Fund Director and Jack D. Furst Professor of Finance Sunil Wahal recognized the need for experts who, in his words, “understand financial markets in a quantitative, sensible way guided by science.”

Wahal wanted to deliver students a structured experience in portfolio management and securities analysis while they earned credit toward their degrees — not merely a club-like or extra-curricular activity in the field. Though most of the 200 or so student-run funds in the country operate on “stock-picker” models, in which analysts forecast how a company will perform and buy or sell accordingly, ASU’s SIM Fund participants build quantitative portfolios, which require thorough understanding of academic theories applied to large groups of securities.

“You can think of the investment management process — the process of building portfolios themselves — as sort of an engineering problem,” said Wahal, who created a new course, “Portfolio Engineering,” for students enrolled in the SIM Fund program. “The analogy holds reasonably well: you cannot engineer a product unless you understand the science behind it. If I told you, ‘Here, go build a car,’ you wouldn’t know how to build a car unless you understand the basics of propulsion, friction, motion, etc. So, to me, it didn’t make sense that we have students build the equivalent of a car without understanding the science behind it.”

In the course, students learn about financial markets, asset allocation, portfolio chance and drivers of risk and return. From there, they evaluate original, published, academic research focused on anomalies in the market. These theories, such as the use of profitability, volatility or insider trading, have been shown to generate higher (and thus, riskier) returns.

Each of the three teams that made up this year’s SIM Fund program selected and presented one such theory. Coincidentally, each group elected to build their portfolio by linking the value and profitability of companies with relatively small or mid-range market capitalizations. After receiving feedback from faculty and the funds’ advisers, who will gather again in the spring to review results, they will execute their strategy within the restrictions mandated by the funds’ investment policy.

Paige Weisman, a senior studying math and physics, joined the SIM Fund as a junior and is leading a team this year.

“A lot of our decisions are democratic — to a point,” Weisman said of her new position. “It’s hard to put your foot down at certain times without being discouraging. You’ve always got to keep things positive and make everyone feel good about the work they’re doing.”

In addition to reviewing literature, students must identify and scrape their own data, transform signals into an optimized portfolio and, ultimately, automate each step.

“It’s a fair amount of work,” Wahal said. “And let’s not forget, these are students.”

“The professionals in this room are astounded by how well these students do,” ASU Enterprise Partners Vice President of Investments Jeff Mindlin said during the presentations. “The SIM Fund demonstrates the role of an endowment in not only sustaining the university for the future, but in making an impact for students’ education in immediate ways.”

Though the students typically produce superior returns, Wahal says the real dividend is the learning they get out of it.

The program’s alumni agree.

“SIM Fund was the single most valuable experience I had during my years as an undergraduate student at ASU,” said Dakota Boyd, who graduated in 2014 before pursuing a master of finance degree at Massachusetts Institute of Technology. He now works as a quantitative trader at Virtu Financial. “Taking Professor Wahal’s Portfolio Engineering class and co-leading SIM Fund my senior year made me realize that I wanted to pursue a career in quantitative finance.”

The experience was similar for Andrew Farber (Class of 2015), who is now an investment associate at Dimensional Fund Advisors.

“For students who are serious about finance, the SIM Fund is a great way to learn the skills and obtain the knowledge necessary to be successful in the field,” Farber said.

As the students’ careers grow, it is likely that so will the SIM Fund investments they made for the university — and in themselves.

 

Top photo: Students in the SIM Fund program present to investors. Photo by Asael Jimenez/Enterprise Partners

Beth Giudicessi

480-727-7402

 
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'DNA origami' is the shape of things to come for nanotechnology

December 14, 2017

Spaghetti noodle-like strands may one day revolutionize medicine by making and delivering drugs inside cells

For the past few decades, some scientists have known the shape of things to come in nanotechnology is tied to the molecule of life, DNA.

This burgeoning field is called "DNA origami." The moniker is borrowed from the art of conjuring up birds, flowers and other shapes by imaginatively folding a single sheet of paper.

Similarly, DNA origami scientists are dreaming up a variety of shapes — at a scale one thousand times smaller than a human hair — that they hope will one day revolutionize computing, electronics and medicine.

Now, a team of Arizona State University and Harvard scientists has invented a major new advance in DNA nanotechnology. Dubbed “single-stranded origami” (ssOrigami), their new strategy uses one long noodle-like strand of DNA, or its chemical cousin RNA, that can self-fold — without even a single knot — into the largest, most complex structures to date.

And the strands forming these structures can be made inside living cells or using enzymes in a test tube, allowing scientists the potential to plug-and-play with new designs and functions for nanomedicine: picture tiny nanobots playing doctor and delivering drugs within cells at the site of injury.

“I think this is an exciting breakthrough, and a great opportunity for synthetic biology as well,” said Hao Yan, a co-inventor of the technology, director of the ASU Biodesign Institute’s Center for Molecular Design and Biomimetics, and the Milton Glick Professor in the School of Molecular Sciences.

“We are always inspired by nature’s designs to make information-carrying molecules that can self-fold into the nanoscale shapes we want to make,” he said.

As proof of concept, they’ve pushed the envelope to make 18 shapes, including emoji-like smiley faces, hearts and triangles, that significantly expand the design studio space and material scalability for so-called, “bottom-up” nanotechnology.

Two DNA origami structures in the shape of a heart and rhombus. Photo courtesy Biodesign Institute

Size matters

To date, DNA nanotechnology scientists have had to rely on two main methods for making spatially addressable structures with finite dimensions.

The first was molecular bricks: small, short pieces of DNA that can fold together to make a single structure. The second method was scaffolded DNA, where a single strand is shaped into a structure using helper strands of DNA that staple the structure into place.

“These two methods are not very scalable in terms of synthesis,” said Fei Zhang, a senior co-author on the paper and Biodesign assistant research professor. “When you have so many short pieces of DNA, you can’t replicate it using biological systems."

Furthermore, each method has been limited because as the size of the structure increases, the ability to fold correctly becomes more challenging.

Now, there is a new way.

For Yan and his team to make their breakthrough, they had to go back to the drawing board, which meant looking at nature for inspiration. They found what they were looking for with a chemical cousin of DNA, in the form of complex RNA structures.

The complex RNA structures discovered to date contain single-stranded RNA molecules that self-fold into structures without any topological knots. Could this trick work for single-stranded DNA or RNA origami?

They were able to crack the code of how RNA makes structures to develop a fully programmable ssOrigami architecture.

“The key innovation of our study is to use DNA and RNA to construct a structurally complex yet knot-free structure that can be folded smoothly from a single strand,” Yan said. "This gave us a design strategy to allow us to fold one long strand into complex architecture.

“With help from a computer scientist in the team, we could also codify the design process as a mathematically rigorous formal algorithm and automate the design by developing a user-friendly software tool.”

The algorithm and software were validated by the automated design and experimental construction of six distinct DNA ssOrigami structures (four rhombuses and two heart shapes).

Hao Yan
The goal of Hao Yan's research group is to achieve programmed design and assembly of biologically inspired nanomaterials. Photo by Deanna Dent/ASU Now

Form plus function

It’s one thing to make crafty patterns and smiley faces with DNA, but critics of DNA origami have been wondering about the practical applications.

“I think we are much closer to real practical applications of the technology,” Yan said. “We are actively looking at the first nanomedicine applications with our ssOrigami technology.”

They were also able to demonstrate that a folded ssOrigami structure can be melted and used as a template for amplification by DNA copying enzymes in a test tube and that the ssOrigami strand can be replicated and amplified via clonal production in living cells.

“Single-stranded DNA nanostructures formed via self-folding offer greater potential of being amplifiable, replicable and clonable, and hence the opportunity for cost-efficient, large-scale production using enzymatic and biological replication, as well as the possibility for using in-vitro evolution to produce sophisticated phenotypes and functionalities,” Yan said.

These same design rules could be used for DNA’s chemical cousin, RNA.

A key design feature of ssOrigami is that the strand can be made and copied in the lab and in living cells and subsequently folded into designer structures by heating and cooling the DNA.

To make it inside the lab, they used the photocopier of cloning sequences, called PCR, to replicate and produce ssDNA.

Inside living cells, they first placed it inside a mule of molecular cloning, called a plasmid, after it was placed into a common lab bacteria called E. coli cells. When they treated the bacteria with enzymes to free up the ssDNA, they could isolate it, and then fold it into its target structure.

“Because plasmid DNA can be easily replicated in E. coli, the production can be scaled up by growing a large volume of E. coli cells with low cost,” Yan said. This gets around the constraint of having to synthesize all of the DNA in the lab from scratch, which is far more expensive.

It also moves them in a direction where they can potentially make the structures inside of cells.

“Here we show bacteria to make the strand, but still need to do thermal annealing outside the bacteria to form the structure,” Yan said. “The ideal situation would be to design an RNA sequence that can get transcribed inside the bacteria, and fold inside the bacteria so we can use bacteria as a nanofactory to produce the material.”

Figure A shows the DNA folding that is designed to self-fold into whatever shapes a scientists can dream up. Figure B shows atomic force microscopy images of emoji-like, nanosized smiley faces.

A new design school

In the software made through a collaboration with BioNano Research Group, Autodesk Research, the user selects a target shape, which is converted into pixelated representation. The user can upload a 2-D image or draw a shape using a 2-D pixel design editor.

The user can optionally add DNA hairpins or loops, which can serve as surface markers or handles for attaching external entities. The pixels are converted into DNA helical domains and locking domains to do the folding. The software will then generate ssOrigami structures and sequences, and the user can view the molecular structure via an embedded molecular viewer. Finally, the DNA sequence is assigned to the cycle strand, and the expected folded structure manufactured in the lab and visually confirmed by viewing it using atomic force microscopy, or AFM.

“We’ve really scaled up the complexity while scaling down the costs,” Yan said. “This study significantly expands the design space and scalability for bottom-up nanotechnology, and opens the door for health applications.”

 

Top photo: Hao Yan, director of the ASU Biodesign Institute’s Center for Molecular Design and Biomimetics, and the Milton Glick Professor in the School of Molecular Sciences. Photo by Deanna Dent/ASU Now

Joe Caspermeyer

Managing editor , Biodesign Institute

480-258-8972