CAFE Growth Fund and the Gabelli Value Fund
A major differentiating factor for the CAFE Portfolio Management Program is that student fund managers have the opportunity to manage two funds that have varying objectives. In doing so, they are better prepared to analyze a wide assortment of securities utilizing two vastly different techniques. The CAFE Growth Fund has a growth objective with a less than one year time horizon, focusing on investments that may be more cyclical in nature. This fund requires that the students do not inherit the prior semester’s fund, allowing them to participate in every stage of the portfolio construction process. Incorporating many of the principles of Value Investing by Graham and Dodd, the Gabelli Value Fund has a longer time horizon, targeting those undervalued companies that will experience appreciation over 1, 3 and 5 years.
Utilizing an innovative seminar setting, the Center deviates from the more traditional classroom setting in order to promote a more efficient flow of information. Every aspect of the CAFE design is geared towards replicating that found in industry today.
Housed in the Center for Advanced Financial Education (CAFE)
The CAFE provides state-of-the-art facilities – most notably real-time financial platforms such as Bloomberg and Money.Net - allowing students to invest and manage over a quarter of a million dollars of donated/endowed funds through CAFE Growth Fund and the Gabelli Value Fund.
Real-dollar fund management creates a dynamic, experiential environment that is invaluable to the students as they step into the world of finance. Utilizing the latest technology employed in the finance sector, the CAFE provides students with an opportunity to gain actual experience in portfolio management. Students learn the control for the inherent uncertainty of stock selection through proper analysis, and the time and effort required to manage a successful portfolio. Asset allocation, diversification, portfolio management and fundamental, behavioral and technical analyses are just some of the skills that the students develop in this class.
The portfolio teams consisting of 10 student fund managers perform all of their own research, calculations and data analysis. The student fund managers use investment tools and news outlets such as Bloomberg, Money.Net, Zacks, TD Ameritrade, Value Line Investment Survey and various other sources to compile information. Once the required information is collected the student managers then calculate their own fundamental data, i.e. Beta, P/E ratio, PEG, Enterprise Value, Return on Equity Ratio, Debt to Equity Ratio, Holding Period Yield and more, as well as constructing correlation matrices and modeling such components as the minimum variance portfolio (MVP).
As stated earlier, a major differentiation between the Mario J. Gabelli School of Business CAFE Growth Fund and those of several schools is that the subsequent classes of student managers do not inherit the prior portfolio. This practice is necessary for students to learn the entire process of portfolio management – from the initial construction phase to the monitoring and evaluation phase. Another key differentiating factor is that the student fund managers only need approval for security from the Director, and not a Board of Advisors. This real world scenario allows for immediate trades that are also executed by the students fund managers.
Finance 450: Portfolio Management / Finance 430: Advanced Portfolio Management
Roger Williams University students have a unique opportunity to invest real-money using the latest analytical tools. Students enrolled in these courses take on the responsibilities of financial analysts from day one. Incorporating much of what they have learned in prior corporate finance courses, capital market courses, and investment courses they are prepared to construct a portfolio from scratch. Besides the typical quantitative lessons such as fundamental analysis, students also address qualitative issues in order to understand the psychology of investing and hence gain a better understanding of investor sentiment. Portfolio management is offered within a seminar setting, allowing students to actively participate in lectures as well a share ideas and analysis techniques.