Senior finance majors get a taste of real world financial decisions
Published: Tuesday, December 7, 2010
Updated: Tuesday, December 7, 2010 23:12
Students at the Smith School have their own simulation of a stock exchange, the Lemma Senbet Fund.
The Senbet Fund aims to allow a learning experience in portfolio management and equity analysis for senior finance majors. Professor and advisor Sarah Kroncke said the team consists of 12 members, who are ranked among the top finance students of the school.
Kroncke says students undergo a meticulous application and interview process due to the Fund's competitive nature. Acceptance into the program is very selective as certain requirements and prerequisites must be met in order to qualify.
The Senbet Fund's goal is to achieve capital appreciation by capturing the superior returns that equity investments have historically provided. The students on the Fund currently manage over $600,000 in their portfolio, Kroncke said.
The Fund offers students an insight on how to make decisions on investing with real money. The Fund also enhances the learning experience for the students by allowing them to practice what goes on in the real world.
"It's an amazing opportunity for you to apply the valuation methods that you learn in class to actual stocks on the market and maintain a real portfolio," said senior finance major, Shawn Ratwani, a member of the Fund.
Results from decisions that are made allow the students to determine which strategies are successful and which are not.
Out of the 12 students, 10 serve as equity analysts and two students act as the Fund's portfolio managers, who oversee the group's positions and performance while aiding in the enhancement of the group.
The portfolio managers assist in providing predictions and news for the Fund.
Weekly meetings are held to review the performance and strategy of the Fund, sector holdings, as well as the current conditions of the financial market.
At the conclusion of the school year, members create an annual report that is presented to administrators and members of the Smith faculty.
Although the work involved in the Fund is highly demanding, it is intellectually challenging and offers students a hands-on experience while preparing them in possible future endeavors.
"The people on the Fund are quite literally some of the best people I have met at UMD — high-achieving, entrepreneurial, hard-working, and fun to be around, this makes the experience special," said, member Steve Jain, a senior finance major.
The overall experience is a worthwhile experience that has gained great recognition among recruiters nationwide. Students have an upper hand, as there are many opportunities to network with professionals in the industry.
"If you're serious about pursuing a career in some branch of corporate finance, the Fund is definitely the best opportunity at the university for you to pursue," Ratwani said.