Fund Management at B-Schools - I

Have a look at this article making waves across major newspapers and even on a few business channels: B-school students cut their teeth on stocks

This article talks about various students at top and middle rung business schools of India getting into the business of fund management by collecting money from their fellow students. Using this collected money, they do the stock picking and give fabulous returns to the “investor colleagues”.

Here is an expert from the article

1:
Be it the Investment Bank of Kozhikode at IIM-K or Arth (inspired by the Arthshastra) at the National Institute of Industrial Engineering or Unnati at Management Development Institute, Gurgaon or Credence Capital at IIM-Lucknow, students are assuming the responsibility of managing kitties amounting to a few lakhs amidst the volatility in the capital and money markets.

2:
“Returns too have been exceptional,” said Anupam Dubey, one of the fund managers at NITIE. While net asset value — loosely, the current market value of investment — of NITIE’s fund was 14 last year, it is up by four points now.

3:
"We sit up till about two in the morning tracking stock movement. Besides, we speak to our alumni and our faculty for guidance. But in the last year, our fund has had returns to the tune of 30%-35% on the sensex stocks and about 60% on the mid cap stocks," Balaji added.


Actually, lots of other sentences can be picked up from the article.

Being myself a student at an international business school, that too doing a specialization in finance, investment and trading, I salute the spirits of the student fund managers for taking the courage to collect the money and take the responsibility of investing it, and I also thank the fellow student investors who have shown confidence in their colleague student fund managers, allowing them to invest the money on their behalf.

It is definitely a very good learning experience as a student and if things go well, the achievements can be added as “flash cards” on to the resume, so as to get hunted by the potential recruiters to get a job of your dreams.

A team member of mine at my previous job is presently studying at NITIE. On his Gmail Profile, he has placed a link to this article and placed his status as “Arth - The Quasi Mutual Fund of NITIE" rocks,” followed by a link to the above article. Very recently, he joined the fund management team.

Though it will be easier for anyone to claim that quote no. 2 is not good, as the investment has grown only from 14 to 18, while Nifty based ETF has returned better than that
OR
from quote no. 3 that 30-35% on Sensex and 60% on mid cap stocks is not upto the mark compared to the overall market rise or the respective ETF returns

But I want to remain positive on this development :- )

One thing that I like about this style of learning is that the students are betting either their own money or they are taking money from the colleagues who trust them. It is the perfect way of learning practically – do your own experiments, setup your own apparatus and then enjoy the rewards or failures yourself. So kudos to the students of these funds.

Continue to Part II