UML Club Invests for Success

12/30/2007
By From the Lowell Sun

By Marie Donovan , Sun Correspondent

LOWELL -- UMass Lowell accounting and finance students are eager to show that they're the top amateur investment managers in the university system. And this fall, they received the funding that will give them the chance to prove it.

The UMass Foundation endowed each of the undergraduate campuses with a $25,000 grant to form student investment clubs to invest in the stock market.

UMass Lowell's student-managed fund, run by Assistant Professor of Finance Ravi Jain, is determined to show up rival student funds from the Amherst, Boston and Dartmouth campuses, said Frank Andrews, undergraduate programs director for UMass Lowell's School of Management.

Several other universities, including Bentley College and Boston College, have student-run investment funds. A 2006 article from The Wall Street Journal claimed that many student-managed investment funds outperform their expected benchmarks.

"The point is to teach them how to invest in a professional way," said Jain, adding that investments will include U.S.-traded securities, mostly equities.

Ten students, all juniors and seniors, were selected for the UMass Lowell fund based on their GPA in overall coursework (3.27 average, on a 4.00 scale) and in the College of Management (3.6 average).

"We actively recruited," Andrews said.

Minhai He, a senior finance major and Tyngsboro resident, said he hopes the club will give him valuable experience toward his goal of landing a job as a junior analyst when he graduates in the spring.

"It helps a lot. We took all the classes. This is a great way to put it into practice," he said.

Jain, who lives in Chelmsford, has been on the UMass Lowell faculty for three years. He's a chartered financial analyst who worked for the Indian Stock Exchange before emigrating to the U.S.

Andrews, a Nashua resident, serves on the investment club's advisory board, along with Steve Rogers from the development office; faculty member Steve Freund; and professional financiers Warren Isabelle and John Kattar.

The board interacts regularly with students, so members are also available as advisers.

"You get a lot of exposure to different industries," said senior Jessica Silva of Lowell. She's an aspiring investment professional who works part time as a customer service representative at Enterprise Bank and Trust to help pay for school.

This year, club members are pretty much all accounting and finance majors. Students start investing on Jan. 1. Throughout the fall semester, they worked in groups of two, analyzing companies and presenting their cases to the entire club on recommended investments at that time.

They must earn 70 percent approval from other club members to go forward with the investments, Andrews said.

"Ravi has set some pretty strict guidelines; our benchmark is the Standard & Poor's 500," he said.

While the portfolio will evolve over time, the group is inititally targeting eight to ten investments, Jain said.

So far, advisers and students are keeping the particulars of their planned portfolio close to the vest.

"There's a few we've discussed," was all Silva would say.