From the Director

Morton Lane

 

 

 

 

 



August 19, 2016

All,

It is my pleasure this month to welcome to the University of Illinois the seventh class of students who are here to gain a Master’s Degree in Financial Engineering. Our class size is 64 and the characteristics of the class continue to be as strong as their predecessors. They are very well qualified.

In reflecting on what themes might affect their passage for the next eighteen months beyond Brexit and the US Election I was struck by three recent pieces from the Financial Times.

The first in on July 17, 2016 was "Asset Management: Actively Failing" and the second on August 3, 2016 was "Investors switch from Humans to Algorithms" and most recently on August 15, 2016 “Investment: Rise of the DIY algo traders”.

There in three articles are the reasons to want to become a financial Engineer.

The first says that markets are changing (they always are) and that discretionary fund management performs poorly - simple ETF investment represent just as good an alternative. The second and third says that to replace or complement discretionary management, funds need Quants aka Financial Engineers. Whether for designing new ETFs or to troll through masses of data to find undiscovered relationships, fund employees need quantitative skills. What more welcoming note could be sounded?

So, that is the theme that affects your passage through the MSFE - your skills are in demand. Never forget however, that markets change, you will need to adapt too. Take the next eighteen months to acquire both the skills and an ability to adapt to new skills.

To all of you - enjoy the passage. It will go fast.


Sincerely,

Morton N. Lane, Ph.D.
MS Financial Engineering, Director
University of Illinois at Urbana-Champaign

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