Teams from the University of Sydney, University of Adelaide and University of Western Australia will travel to Seoul, South Korea, in April 2018 to compete in the regional final of the CFA Institute Research Challenge.
The diversity and high calibre of participants in this year’s event has delighted the judges, who described the competitors as the “future guardians of Australia’s Superannuation pool”.
Credit Suisse Australian equity strategist Hasan Tevfik, CFA, said real-world experiences such as the Research Challenge offered students “an excellent forum to practise the process of building and delivering an investment case”.
As a judge, Tevfik, said it was promising to see such high-quality analysis being presented by all the finalists, and that such a challenge would “help students succeed in protecting and growing pension assets”.
The Research Challenge, which began as a local contest by the New York Society of Security Analysts in 2002, has grown into a global competition that attracts thousands of students from about 75 countries.
It provides university-sponsored teams with the opportunity to research and analyse a publicly traded company while being supported and trained by mentors and company executives. The teams are then expected to produce a written report on their assigned company with a buy, sell, or hold recommendation, with the possibility of presenting and defending their analysis to a panel of industry professionals.
A taste of the real world
BT Investment Management head of Australian equities Crispin Murray said both the CFA community and the students have gained considerably from participating in the Research Challenge, and said it was crucial for those in the industry to “share their experiences and insights [in order to] attract the best quality of students”.
“The Research Challenge allows students to apply the theoretical framework for stock analysis to a real-world situation [that] contains ambiguity and complexity, which requires investors to think laterally and weigh up conflicting factors,” Murray said.
Murray, who was also a judge, said the Research Challenge allowed participants to demonstrate their passion about investment and their ability to collaborate as a team, which is a key skill to have.
The event consists of three stages, beginning at the local level, where the winners progress into the regional and later the global challenge, where one team is finally crowned global champion.
Three heats took place in capital cities around the country in October. The University of Sydney, the University of Adelaide and the University of Western Australia were the respective winners of the Sydney, Melbourne and Perth challenges.
University of Sydney student Gary Chen praised the challenge and described it as “an immense learning experience” that has enhanced the team’s finance skills and fostered their interest in investment banking and funds management as future career paths.
University of Adelaide student Tyler Glanville said the challenge refined and improved the team’s valuation skills and taught them an important lesson about taking a far more pragmatic approach.
“We’ve learned that to properly value a company, you need a thorough analysis of its strategies, industry, competitors, economics and much more. And once you think you know the company, that’s when the suite of valuation models [become] integral to supporting your recommendation,” Glanville said.
HESTA general manager of listed assets James Harman, CFA, who has been involved with the Research Challenge as an organiser, a volunteer and a judge, said that although the CFA component was small compared with other parts of the industry, and was not “a broad base where [students] get to see what happens in the superannuation world, [it nonetheless] might give [students] the impetus to see whether they would like to enter the industry”.