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March 1, 2001

One Tough Cookie

By Sanford Wexler

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When Jennifer Setzenfand interviewed for her first job on the Street, she was asked by a senior trader, "Are you a tough cookie?" She immediately replied, "Well, yeah." The veteran trader fired back, "Good. You are hired."

Today, Setzenfand is an assistant vice president and one of eight traders on the equity and high-yield bond trading desk at Federated Investors in Pittsburgh, Penn. Federated Investors (NYSE:FII) is one of the larger mutual fund management firms in the country with some $130 billion in assets under management. Setzenfand's trading desk manages about $25 billion in assets, including 80 percent equities and 20 percent high-yield bonds. Equity trading comprises 60 percent listed and about 40 percent Nasdaq. Federated has 12 portfolio managers and shares traded daily are valued at about $150 million.

Although only 27-years-old, Setzenfand talks like a seasoned trader who has had many years of experience. That's because her father is a head trader at Legg Mason Wood Walker in Baltimore. "I come from a trading family," Setzenfand said, "so I feel that I've been trading my whole life."

Setzenfand's father, Dennis Green, was far from enthusiastic about having his daughter follow in his footsteps. "My father was insistent that I don't go into trading. He wanted me to go into investment banking," Setzenfand, who is married and uses her husband's last name, recalled. "He [her dad] was of little help except to give me a few names."

Born and raised in Cleveland, Ohio, Setzenfand graduated in 1995 from the University of Ohio in Athens with a degree in finance. While attending college she worked as a runner at the Chicago Stock Exchange. Setzenfand soon discovered that the fast-paced and highly challenging life of an equities trader was for her.

Upon graduating from college, she joined the Chicago office of Mayer & Schweitzer, which is now part of Charles Schwab & Co., as an over-the-counter, assistant trader. Two years later, she switched over to the buyside and moved to Federated as a full-fledged equities and convertible bond trader. "I left the sellside because I wanted to learn more," Setzenfand said.

In this volatile marketplace, she said, the biggest challenge for the mutual fund buyside trader is keeping tabs on shareholder redemptions during down swings and on subscriptions during market upswings. Another challenge is being compared to other funds, Setzenfand added. "We are compared to our peer groups," she explained. "If you are a large cap, blend fund you are compared to other large cap, blend funds. Even though the market is down or up, you are still expected to do better than your peers."

At Federated, traders work in tandem with the portfolio managers and analysts. "We work with the portfolio managers to make the funds perform," Setzenfand said. "We are a team process here. Trades are not slipped to us on a slot through the door."