Managing a $4.8-million portfolio, Sauder students are learning the risks of business
When Hurricane Sandy forced the closure of the NYSE, a group of finance students in Sauder’s Portfolio Management Foundation (PMF) program quickly converged to evaluate the impact on their $4.8-million portfolio.
As it turned out, they had invested wisely.
“Sandy created liquidity issues for all investors given that the markets were closed for two days in a row for the first time since 1888, but we luckily didn't have any urgent needs to divest of any of our positions,” says fourth-year BCom student Daria Panteleeva, a PMF fund manager.
The storm provided yet another real-world learning experience that will stand her in good stead when she starts work at Goldman Sachs as an analyst in New York next year.
While the young investors came through the hurricane unscathed, Panteleeva notes that sometimes the climate in the market can be turbulent.
“The risks are real and we are given the freedom to make mistakes and learn from them,” she explains.
Supported by Sauder finance professors and 17 mentors and advisors from the financial services industry – many of whom are Sauder alumni – the PMF team uses the latest tools to analyze the market in real time.
With the new Wayne Deans Investment Analysis Centre at Sauder at their disposal, students have instant access to global capital markets. Offering five Bloomberg terminals, four Standard & Poor’s Capital IQ workstations and four Thomson Reuters Datastream workstations, the centre is a powerful hub with the full range of tools used on Wall Street.
“If we want to take students from understanding theories in a textbook to where they can understand how to apply those ideas in a real-world capital markets context, we need the world conveniently located inside the building,” says finance Associate Professor Murray Carlson explaining why the new analysis centre has become an essential part of finance training at Sauder.
So, when major news such as the recent hurricane breaks, fingers not only begin to fly across Bloomberg terminal keyboards worldwide, but also in Sauder. And the number crunching taking place in the trading centre is informing investment decisions as real as any being made on the trading floors worldwide.
“In terms of investment decisions we are free to do what we want within our mandate,” says Panteleeva.
Indeed, the fund’s performance reflects the volatility of the market– from a $1.012 million loss in 2008 to a $1.180 million gain in 2009.
However, it should be noted that the skill of Sauder’s PMF team over the years has seen substantial growth. Since starting with $350,000 worth of donations in 1987, the PMF team has delivered an annual return of 9.8 per cent to get it to its current total of $4.8 million.
This success is not going unnoticed.
When Goldman Sachs hired Panteleeva, along with several of her cohort, they highlighted her PMF experience as a major plus.
“My experience in the PMF program and using the investment tools here makes me feel much more prepared than I would be otherwise,” she says.
“Ultimately the reason why someone wants to see you on the trading desk is that they want you to become profitable as quickly as possible. You can only do that if you are well prepared and able to learn fast.”