It’s safe to say that Union students participating in a major academic stock market competition, the annual CQA Challenge, would not trade away their experience.
Sponsored by the Chicago Quantitative Alliance, a leading professional investment organization, the event brings together some 20 to 30 teams of undergraduates and graduate students from top schools worldwide.
2020 CQA Challenge team members are, from left, Henry Scott '20, Rob Harrington '20, co-captain Jarrod Trief '20 and Seif Refaat '20. Not pictured is co-captain Ross Kesselman '21.
“Students have the opportunity to learn and apply stock selection and portfolio management skills in a simulated, real-life hedge fund experience,” said Ross Kesselman ’21, an economics and political science major from Newton Centre, Mass.
Kesselman serves as captain of Union’s CQA team. Team members also include Arya Amuzgar ’22, Sol Ben-Ishay ’21 and Matthew Cerminaro ’22.
The investment challenge runs from mid-October through March. Teams are given a hedge fund mandate to manage and judged on a combination of their return value, risk-adjusted return and presentation of strategy.
Alliance members serve as sponsors and mentors, so participants learn from successful quantitative investment practitioners while pitting their skills against each other.
“It’s terrific to see undergraduate teams like ours compete with grad students in finance and economics,” said Satya Pradhuman ’85, who has volunteered as a sponsor of Union teams the past seven years. He is CEO and director of research at Cirrus Research, an independent firm based in Tarrytown, N.Y., that caters to mid, small and micro-cap investors.
“I try to remind students not to worry about where they place as a team. Instead, I tell them to appreciate the tools they are exposed to, and importantly, the language of investing they learn,” Pradhuman said.
The CQA challenge allows students to experience every aspect of portfolio management through the Stock-Trak investment simulation platform.
“The competition is pretty sophisticated with many requirements that are rigorously enforced,” said Tomas Dvorak, professor of economics and the team’s faculty adviser.
He noted that CQA uses advanced metrics to evaluate teams, and it offers a wealth of resources, including access to the multinational media conglomerate Thomson Reuters, enabling teams to conduct their research and make informed decisions.
“Overall, the stringent rules make for a meaningful competition,” Dvorak said. “For example, the teams can't have an entire portfolio made up of only one position. Instead, they must analyze a large number of stocks and think through how they fit into a portfolio.
“The participation in the challenge requires a great deal of commitment from the students. The fact that Union students took second place last year and are doing quite well this year is impressive.”
Kesselman said his coursework in macroeconomics and financial analysis helped him lay the foundation for a successful meet.
2019 CQA Challenge team members are, from left, Seif Refaat '20, captain Justin Nguyen '19, Ross Kesselman '21 and Amin Mohamed '21. Not pictured are Henry Scott '20 and Rob Harrington '20.
Last year, Union’s CQA team tied for second place with Washington University in St. Louis, Mo., with the University of California-San Diego taking first place. Kesselman led the team and served as portfolio co-manager with Jarrod Trief ’20.
“We outperformed 35 other teams from top undergraduate universities and business school programs,” Kesselman noted. “The portfolio performance returned 27.83 percent from November 1, 2019, through March 27, 2020, compared with the S&P SPY ETF, which returned 20.8 percent.” In the same period, the SPY index returned -20.8 percent. The team also created superior risk-adjusted returns with a Sharpe ratio of over 3.0.
“Ever since I joined the Student Investment Fund my freshman year, I knew I wanted to work in finance,” said Trief, who majored in managerial economics. He is now working as an analyst in securitized products sales and trading at J.P. Morgan in New York City.
“By the beginning of my junior year, I had taken a wide array of economics and statistics classes and became increasingly interested in sales and trading,” Trief said. “I met Ross through the investment club, and he shared my passion for the market. For the trading challenge, we put together a team of top students who equally shared our enthusiasm and knowledge of markets.”
Justin Nguyen ’19, an investment banking analyst at Goldman Sachs who majored in mathematics and economics, also joined a CQA team while at Union.
“The practical nature of the challenge complements the theoretical element of the classroom,” he said. “Doing these two things side by side helped me link concepts together and see how they would play out in the market. It also was an absolute thrill doing this challenge with my schoolmates.”