Author Archives: CFAMNEB

Event Recap: “What’s next for Commodities”

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By Joseph G. Ogega, a student in Financial Mathematics at the University of Minnesota and CFA level I candidate.

On February 15 CFA Society Minnesota hosted a presentation by Robert P. Ryan, SVP of Commodity & Energy Strategy at BCA Research. Bob comes with more than 30 years of experience in options market and trading. Prior to joining BCA as an ME in 2014, he worked at New York Mercentile Exchange, as a Senior Economist and Director of Options Research, Commodity markets.

Bob discussed how some macroeconomic factors and policies in key global economies impact supply-demand dynamics in commodities’ market. According to him, OPEC producing countries led by Russia and Saudi Arabia will most certainly maintain their production levels for the remainder of the year. “The demand for crude oil and other refined products is expected to spring up or at least be steady in 2018 through 2019, as a result of significant growth rates registered in approx. 75% of countries monitored by the IMF,” he said.

Global supply of crude oil is expected to increase on average by 1.98mm b/d leading to 99.64mm b/d in 2018, hence U.S. shale-oil production rising by 1.15mm b/d leading global growth. Coincidentally, global demand is also expected to increase by 2mm b/d in 2019 from 100mm b/d in 2018.

“In 2019, global crude and liquids supply will average 102.22mm b/d (+2.58mm b/d), led again by surging U.S. shale-oil production (+1.39mm b/d). “ (view graph here, slide 4)

 

He also believes that the recent move by the Fed to raise interest rates will boost crude oil prices as a result of appreciation of the USD. (view graph here, slide 9) This effect will be felt more in the second half of 2018.

The rapid decline in Copper prices -between 2011 and 2017- is believed to be due to China registering slower growth over the same period. However, with a strengthened USD, Bob believes that the market will be able offset the supply shortfalls.

China, have since implemented monetary and environmental policy reforms aimed at encouraging importation of high-grade ores over low-grade ores. Though this has caused a depression on steel prices, China remains the biggest global consumer of iron ores. Australia and Brazil have also adopted similar domestic policies.

As a parting shot, Bob strongly believes that the Energy markets is going to boom in the foreseeable future (five to 10 years from now).

Ryan, R (2018). Commodity Revival At Risk [slides 4,9]. Retrieved from BCA Research.

Changing Perceptions Interview with Jeannette Parr, CFA – Senior Portfolio Manager

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Tell me a little about yourself.

I am originally from Nebraska, and went to the University of Nebraska-Lincoln majoring in finance. While there, I got a good taste for money management through a student-managed fund opportunity. I came to Minneapolis after graduation and started out at a small equity firm with 10 employees. After a year, the principals couldn’t agree on a philosophy and things fell apart leaving us young folks looking for new jobs. This brought me to what is now ING where I got familiar with fixed income I was hired as a trader, and moved into an analyst role making high yield corporate bond recommendations. That led to a portfolio manager role focused on insurance company portfolios. Because Minneapolis was such a great center for financial management, brokers would sponsor road shows – breakfast meetings to ask management questions, learn about companies and risks involved. I met folks at American Express and when they had an opportunity and knocked on my door, I had to say yes. It really propelled my career forward, and I spent the next 10 or so years there.  Like many women at that stage in their career, the demands of family and work can be difficult to balance. My husband and I had two big careers, three busy children and felt we needed to  make a tough decision. While it wasn’t the best financial decision, we agreed both of us would be happier if I spent more time with the kids, so I took a five-year break. After that, I took a position at the University of Minnesota, which was a good way to transition back into the markets and fulfill my intellectual curiosity. Working with students on an investment fund was a great opportunity for me to get reacquainted with the tight network of mentors at the university from our local investment community. This is how I met the CIO at Prudent Man Advisors where I currently work; we manage money for public entities across the Midwest. My current role as portfolio manager in a small firm is a nice cumulation of everything I’ve learned in the industry.

What sparked your interest in the investment industry and CFA Program?

Math was a subject that I enjoyed but didn’t have a clear career path. I was encouraged by professors early in my college years to take the actuarial science path but realized it was more theoretical than I wanted. I preferred an applied math route and switched back to finance I learned about the CFA Program through my undergraduate finance professors and jumped into the CFA Program 1 year after graduation as I was used to studying and it dovetailed nicely with my work. My employer supported me in the process, paid for my exams and offered career potential. I was surrounded by CFAs in the investment department.

How did you land your first role?

It took a long time to find my first job, which can be true today. Back then the effort was focused on newspaper want ads and sending out resumes by mail. It can be highly competitive and you must be persistent and believe in yourself. I encourage recent graduates to actively pursue their career goals. Whatever role you want, put yourself in a position to interact with those involved and do what you can to manage your own portfolio, even if it is hypothetical. Be persistent and continue to learn. You’ll find the opportunity, though it may take time.

Did you have a mentor or champion who was instrumental in your career?

All of my bosses along the way were influential. Doug Hedberg, CFA at Washington Square Advisors was my main mentor early in my career. He gave me lots of opportunities to try new things. One example was being a young professional and voicing a contrary opinion that high-yield bonds weren’t gone forever after failure of Drexel and Michael Milkenhad caused in the market. It was a way to grow in my presentation skills, embrace that it’s okay to voice an opinion and take some risks.

What professional opportunities and challenges have you experienced?

I do feel like it’s a bit of a male dominated field. Early on if you were not playing golf on Friday afternoons with the rest of the leaders you had more challenges. I had clients that preferred a male portfolio manager so there was overcoming some of those gender preference hurdles. The industry can be a bit like a locker room; there’s a lot of culture that stems from a male dominated way of doing business. I was still able to thrive and move forward staying true to my beliefs, morals and values. One of the most interesting aspects of finance is the ability to learn about so many different industries and have an inside view of how the world is changing. Transferring that information into wealth accumulation and risk management for clients so they can achieve their goals is very satisfying.

What is the biggest risk you’ve taken in your career?

Stepping away from the field and spending time with my family. I wondered if I was ever going to come back and how it would alter my future path. Had I known then what I know now, it would have made the decision so much easier! It worked out just fine. During my break, I managed my own portfolio, went to some CFA meetings, kept my CFA Charter going and stayed in touch with that circle. I think there’s always a door open and an opportunity will arise.

What got you here; how have you been successful in investment management?

I think the key to success is being informed and humble; I saw a lot of people along the way who weren’t long-lasting. Some investment ideas work for a short period but burn out quickly. To have staying power, you need all the things that CFA Charter stands for. If you balance all those things, the financial industry is a great place to help a lot of people and institutions reach their financial goals. We all have to deal with finance in one way or another, it’s a skill-set that transfers well in people’s lives.

18% of CFA Institute’s members are female, and 14% of CFA Society Minnesota members are female. Do you have any thoughts on why more women aren’t pursuing a career in investment management?

I think culture is part of it, women not knowing if they’ll fit in. Secondly, it tends to be highly competitive. Hard driving teams are not always that welcoming to women’s typical work style or interests. The industry is also known for some long hours, so it can be a tough work/life balance.

Research has proven that the returns of diverse investment management teams out perform those of non-diverse teams. Have you seen this in your experiences?

I do think whether it’s gender or other kinds of perspective, groups benefit from that variety. We all come to the table with different experiences and having a diverse team does help. It’s a field where you debate ideas, and the more angles you have, the more developed that thesis can be. Communicating a message is also key to success, and having a professional staff that is reflective of your client base can be very beneficial.

Do you have any advice for young professionals interested in a career similar to yours?

Try to spend some time with people in the industry talking to friends of your parents, neighbors, etc. You’ll be surprised how small the world is; someone is always a phone call or two away. Don’t be intimidated, know that the steps in this career path are achievable and attainable.  Take the time to build the foundation and follow the path that is most interesting to you. There are many directions the industry and the CFA can lead you.

As a longtime CFA Charterholder, how have you seen the CFA Program and industry evolve?

One of the biggest changes is that information is so much more available. It used to take lots of staff to create a financial model for a company. Now we have data downloads and with a push of a button, instantly 10 years of history. You must be a good consumer of information to be able to discern fact from fiction. The markets are faster, there’s less time to gather information (compared to road show days) and to vet ideas. Different skills are required than you might expect; practice writing and speaking, the best investment idea doesn’t get anywhere if you can’t communicate. Developing all of those soft skills will help you go far.

 

This interview was conducted by CFA Society Minnesota’s Member Services Manager, Diane Senjem.

Changing Perceptions Interview with Dr. Mary Daugherty, CFA – Financial Educator, Consultant and Corporate Director

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With her merited achievements and stark determination, Dr. Mary Daugherty has successfully shaped a career that utilizes her CFA designation and PhD all the while keeping her personal values a priority. When hearing about her numerous successes, many wonder, “How did she get started?”

When Daugherty distinguishably earned her Chartered Financial Analyst (CFA) designation in ‘86 by consecutively passing the grueling series of three exams, she could not have predicted the path her career was about to take.

After earning her general business degree from the University of St. Thomas in ‘80 and receiving her Master’s degree in Finance from the University of Minnesota’s Carlson School of Management in ‘82, Daugherty took her first professional position as an equity research analyst for First Trust. This is where she met her mentor, Gerry Bren, who she describes as an instrumental influence on her career.  After a six year career developing her skills as an equity research analyst, Daugherty was about to take the biggest risk in her career by leaving not only First Trust, but also the entire industry to pursue a new path. That path being college teaching.

When Daugherty gave birth to her first child while at First Trust, she tacked on her company-allotted two weeks of vacation in addition to her six weeks of maternity leave in order to meet the demands of mothering her newborn daughter. However, her boss discouraged her from taking this extra time off as he said, “You are an officer of this company, so you should set an example.” Daugherty took the extra two weeks but did find FedExed documents on her doorstep for her to work on during maternity leave. It was not until she received a call from her husband while on a business trip in New York that she decided to leave her current position and look for a more accommodating career. She learned she had heartbreakingly missed her daughter’s first steps.

“Similar to many professional women in that era, I looked for an opportunity that would allow me more flexibility while still staying active in my professional community,” says Daugherty. So, what was the next step?

She simultaneously enrolled in a PhD program at the University of Minnesota while accepting a teaching position in the Finance department at the University of St. Thomas. During this time, she proceeded to have three more children and impressively wrote and defended her dissertation on private college endowment management. After six years of “a complete blur,” as she describes it, she earned her PhD in ‘93 and focused on building her consulting practice while also teaching as a professor at the University of St. Thomas. She would go on to receive four awards for excellent teaching awarded by faculty, students and alumni, and has been nominated for several more. Daugherty is known on the St. Thomas’ campus not only as an outstanding teacher, but as a generous, understanding and committed mentor.  She says, “I love my job as a professor and do my best to bring out the talents in every one of my students.” Through mentoring, lining up job opportunities and helping students reach their full potential, Daugherty is always eager and happy to help anyone who knocks on her door.

While continuing with her teaching career, she decided to further utilize and monetize her PhD and CFA designation, and pursued consulting opportunities with individuals and corporations, including U.S. Bank. While building upon her consulting business, another mentor taught her an indelible trait. Daugherty says, “Tom Holloran role modeled by example how to collaborate and work together with people to get great things accomplished. I learned a lot by observing Tom in action. Tom recommended me for my first Board position.”

How has Daugherty created such success for herself in every aspect of her career, and what advice does she have for others in this industry?

Exceptional merit is not the only thing that has contributed to Daugherty’s success, “I don’t even know how to say ‘I can’t’.” She says this trait of insistent perseverance was ingrained into her through her family and mentors. As a mentor herself, she frequently tells her students, “I will always help those who help themselves.” In order to be successful in this industry she stresses the importance of reaching out to peers, taking on new challenges and look for opportunities to learn.

As a professor and consultant, Daugherty has a true passion for helping people. She currently serves on four different boards of directors and is an advisor and professor for the Aristotle Fund at the University of St. Thomas. She encourages all students pursuing jobs in finance and investments to get their CFA designation because of the “appreciation and breadth of knowledge” it entails. She also cannot stress enough the importance of reading and being well versed in all subject areas in order to further enhance one’s diversity of thought. In a world of increasing technology she reminds us, “Robots can do anything we can do, but they cannot be resourceful and creative. I would take a resourceful person over a smart one any day.”

Daugherty also strongly encourages young women to consider careers in the financial and investment industry. Presently, while businesses are more willing to accommodate the needs of mothers, she sees the male-dominated culture of this industry as still being prominent. While advising the Aristotle Fund, Daugherty has observed a wider range of ideas and problem solving strategies brought to the table when female and male students are collaborating. She urges more women to jump into the world of finance in order to bring different perspectives into this industry and ultimately bring a change to the current culture.

With her 35 years of success in the financial world, Daugherty would give young professionals this specific piece of advice, “Absolutely get a job, any job, and then be the best at that job you can possibly be.” This is certainly how Daugherty has seen such success in each aspect that her career path has taken her. Nevertheless, it is clear to see that, as a professor, she has ended up in a position she is highly skilled at, truly passionate about, and that which provides her an abundance of gratification. She recognizes how fortunate she is to be able to say that she leaves her “office”, her classroom, almost every day with a smile on her face!

 

Student Interviewer

Maria Vitale is a sophomore at the University of St. Thomas studying Economics and Political Science. She grew up in Stillwater, Minnesota and plans on pursuing careers in the financial industry upon graduating in 2020. Maria hopes to incorporate her passion for writing in any position that her career path may take her.

Changing Perceptions Interview with Mariann Montagne, CFA – Portfolio Manager

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Tell me a little about yourself

I earned my bachelor’s degree in finance from the University of Detroit then immediately began studies to become a CFA Charterholder. I am a portfolio manager at Gradient Investments, an investment firm with $2bn AUM and about 15 portfolios.

What sparked your interest in the investment industry and CFA Program?

I set out to do a book report on John D. Rockefeller in 8th grade. For research, I called Merrill Lynch and talked to a broker. I was fascinated with the amount of information this broker had at his fingertips. Throughout high school and college, I read the newspaper cover to cover and talked with my dad about investments. He also has a degree in finance from the University of Detroit, though he was not an active investor.

How/where did you land your first role?

After my second year in college, I went door to door to brokerage firms, banks, savings and loans and insurance brokerages for about a week. At the end of the week, I had two offers and went with a regional brokerage firm.

Did you have a mentor or champion who was instrumental in your career?

The interesting thing about mentors is that I am still looking for mentors —men and women, old and young people— people with good insights, experience and inputs. But no, I did not have just one.

What professional opportunities and challenges have you experienced?

A few challenges would be keeping up with day-to-day changes in the investment arena, and taking time off to be with my kids for several years. Because I am very eager to learn every day, I find that opportunities may show themselves from new inputs. A big opportunity I had was to come back to work for the same bosses twice in my career.

What is the biggest risk you’ve taken in your career?

The biggest risk I’ve taken was choosing to stay in the Midwest. I have friends who are in New York and can just go down the street for new opportunities. But I really value the honesty and integrity of the Midwest.

What got you here; how have you been successful in investment management?

Along with eagerness to learn, I was naturally an extrovert in an introvert role. I asked questions others are afraid to ask, I take good notes, I ask good questions and compile good data, noting the cadence of performance vs. expectations has been helpful in my career.

18% of CFA Institute’s members are female, and 14% of CFA Society Minnesota members are female. Do you have any thoughts on why more women aren’t pursuing a career in investment management?

I have wondered about this for a long time. I was the fifth woman president at the CFA Society Detroit in 2004. The first woman president was in 1983. I keep looking at the progress. It took 20 years to have the fifth woman president; why 20 years? I don’t understand. I think that maybe we need to address the girls when they’re still in middle school and not wait for the discussion in college. We need to get them interested in the idea of compounding and being patient, long-term investors. I think we just need to start earlier. There’s some unconscious bias by everyone to think that this is a man’s type of profession but look at Muriel Siebert – the first woman to own a seat in the New York Stock Exchange and opened her first firm in 1967. Money is agnostic, it doesn’t care what you look like. Why not just gather the skill set and use some determination? There are a lot of attractive aspects about this business.

Research has proven that the returns of diverse investment management teams outperform those of non-diverse teams. Have you seen this in your experiences?

I think so because most women are more patient and less trigger happy. I know sometimes its client driven and they want to see a change in sells and buys, but women are more cautious about changing from an old horse to fresher horse. Having that level of patience pays off in the long run.

Do you have any advice for young professionals interested in a career similar to yours?

My advice is to be more extroverted than others and resilient, keep that childlike eagerness to learn and always maintain your integrity. Find the place where you respect the people around you – but if you don’t, move on.

As a longtime CFA Charterholder, how have you seen the CFA Program and industry evolve?

When I first started, it was a rarity to hear people say they are studying for the CFA exam. Now, it’s more common. The pass rate is still low, but more people are attempting it. I am blown away by the numbers that are added to the rolls each year.

 

Student Interviewer

Yeng Lee is a first-generation student at Gustavus Adolphus College in Saint Peter. She was born and raised in Saint Paul and was first introduced to economics in her senior year of high school, which really intrigued her. Yeng is studying Financial Economics and English with a writing emphasis. After she graduates, she plans to take the CFA Exam and build on her experience to become a financial analyst. Yeng’s lifetime goal is to be a philanthropist.

Changing Perceptions Interview with Joan Kampmeyer, CFA – Private Investor

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Tell me a little about yourself 

I have a Bachelor’s degree in French from the University of Minnesota.  I went on to get my MBA from the Carlson School of Management at the University of Minnesota and earned my CFA Charter in 1986.

What sparked your interest in the investment industry and CFA Program?

I have always had an interest in business since graduate school. I started out in corporate treasury at a company called Jostens, which was a public company at that time. During my five years with the company, I became Assistant Treasurer with responsibilities that included oversight of external managers running the company’s pension fund. So, through that exposure, I met managers who had the CFA designation, and it intrigued me, though I didn’t really need it in my work at that time.  I thought the CFA was worth investigating, one thing led to another and three years later got my CFA Charter.  At that time, I worked for an investment banking unit that was part of what is now Wells Fargo. It really paid off when I moved to Ameriprise as a fixed income analyst where professionals were strongly encouraged to obtain a CFA.

Did you have a mentor who was instrumental in your career?

I never really had a mentor.  At that time there weren’t a lot of women in asset management; in fact, I can think of only one who was a senior portfolio manager. I think the critical element is not just having a mentor but also making sure you cultivate your network on a regular basis.  That way, when you are looking to make a change, you can tap your network.

The CFA Charter also helped me find a position in asset management.  I went to a CFA Society Minnesota monthly luncheon and sat next to a woman who worked at Ameriprise.  It was she who told me about a fixed income analyst opening.

What professional challenges have you experienced?

My challenge was how to stay in finance yet move my career in new directions. I went from working for a consumer-based company, Jostens, to working for a large banking institution, to working for an asset management firm, and finally a family office. Therefore, the challenge is how to navigate all the different choices out there without thinking of it as too much of a stretch.

What is the biggest risk you’ve taken in your career?

The biggest risk was to leave the corporate world and leap into investment banking.  The nature of work was completely different from what I had been doing at Jostens. In addition, it was a newly formed group with no track record and I was the only female professional.  Lastly, I took a small cut in salary but added bonus potential.

Do you have any advice for young professionals interested in a career similar to yours?

Follow your instincts and don’t be afraid to try new positions and industries. Every job is different, and there are a lot of opportunities in the world of finance and investments. You may have to take more of a zigzag path, but that can actually make it a lot more fun.

 

Student Interviewer

Francine Umumarungu is from Kigali, Rwanda, and a senior at Gustavus Adolphus College majoring in Financial Economics. Her plans after graduation are to take the CFA Level One Exam in December and apply for a job in the finance or investment field to gain work experience before embarking on the rest of the CFA Program.