Competitive Agility at Forefront of New Finance Curriculum

July 20, 2012

This year, finance majors at Isenberg will gain greater alignment with state-of-the art industry practices when the School rolls out an expanded undergraduate finance curriculum. In the year ahead, Isenberg will add new faculty members and more courses, replacing its two-track curriculum of Investments and Corporate Finance with the four tracks, Corporate Finance, Financial Analyst, Risk Management, and Alternative Investments. "The idea is to create resilient graduates who can help their employers adapt decisively in dynamic financial markets," notes Sanjay Nawalkha, finance area head and the curriculum's chief architect.


Under the new program, students complete three core courses in Corporate Finance, Investments, and Financial Modeling, followed by a focus area in one of the four tracks. Three of those tracks also incorporate training that positions the students to earn industry certifications, such as CFA (Financial Analyst track), FRM (Risk Management track), and CAIA (Alternative Investment track).


"Our undergrads will gain tremendously from the new courses and additional tracks offering exposure to different sides of complex financial markets; learning skills for valuing a variety of securities; and managing financial risk from multiple dimensions," remarks Nawalkha.  Many undergraduate finance programs have scant offerings for undergraduates in Risk Management and Alternative Investments, he notes. "We have special strengths in those areas, including our world-class Center for International Securities & Derivatives Markets (CISDM) and an industry-backed professional charter in the alternative investments area (CAIA) founded and run by our own finance faculty members. In other words, we have the faculty and industry connections to give our students a true competitive edge.


"To make their mark on industry, Isenberg graduates must learn to manage the entire gamut of investments, from stocks and bonds to mutual funds and hedge funds," emphasizes Nawalkha. Finance students at Isenberg, he says, get lots of hands-on experience: extensive coursework in financial modeling, meaningful industry internships at top financial firms, and hands-on money management skills through the student-run Minutemen Equity Fund, which Nawalkha says goes beyond stock picking to include researching stocks and writing analytical reports. Next year, he adds, Isenberg undergraduates may have more funds to manage in areas such as fixed income and alternative investments with real time analysis using twelve Bloomberg terminals donated by Babson Capital. 


Professor Mila Sherman's course in Alternative Investments offers a true hands-on experience. Last semester, student teams managed true-to-life versions of several funds and portfolios in cooperation with industry sponsors. Using financial modeling tools, teams managed target returns for a public pension fund and attempted to maximize returns for a hedge fund.  They also analyzed and provided asset allocation suggestions for the UMass endowment and attempted to minimize risk in an insurance company's portfolio.


"The bottom line is that our students learn to manage risk; if you don't, your organization can lose money," emphasizes Sherman, who developed the course with resources from a Lilly Fellowship, a UMass Amherst program for outstanding teachers. "Our aim is to give our students greater adaptability and marketability after they learn the fundamentals. "In my course they learn the ropes of active asset management through exposure to traditional and alternative investment tools. That includes understanding different financial market environments, tracking the correlations of assets to assets, and managing for changes in asset exposure, which sometimes can be nonlinear and quite dramatic."


"Isenberg finance graduates bring resilient leadership skills to their enterprises and to the economy itself," notes Nawalkha. "Finance is ultimately a service function that allows the real economy to grow. Most importantly, finance allows money to flow more efficiently and productively, so that the entire economy can benefit-from micro-lending to poor farmers in Bangladesh, to funding local restaurant start-ups, to raising private equity for the next Facebook, Google, or Apple. Commonsense regulations about more disclosure (especially regarding derivative transactions), reducing the oligopolistic structure of the financial industry, and limits on leverage and indiscriminate betting by financial institutions with publicly insured deposits and insurance/pension liabilities are key to restoring trust in the U.S. financial markets. That's a perspective on finance that we teach at Isenberg."