Tag Archives: CFA Society Minnesota

Day in the Life of a Director of Research Event Recap

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By Steven Rohrich, CFA, Associate Director, Performance Analytics, Pavilion Advisory Group Inc.

On November 16, a group of students and their professor, along with other business professionals had a chance to learn from  Josh Howard, CFA and Scott Opsal, CFA. Over the course of lunch, our speakers shared with us their backgrounds as Directors of Research, daily tasks, and important tips to become investment professionals.

Background

Josh Howard, CFA, Director of Investment Risk and Performance at RBC Global Asset Management, and past President of the CFA Society of MN, taught high school math before breaking into the investment field. Josh was always interested in AP Statistics and began his career as a quantitative analyst building models for risk and returns. Scott Opsal, CFA, Director of Research at The Leuthold Group, LLC, began his career working on the management side of funds typically held in pensions and 401(K)s. He also taught Security Analysis at UW Whitewater. Both are now working closely with quantitative funds. Scott focuses on tactical allocation, and Josh’s concentration is on factor investing and managing risk. Like their roles, the firms they work for are quite different as well. The Leuthold Group, LLC is an RIA with 25 employees, over 1 billion AUM focusing on sell side, and buy side mutual funds and SMAs. RBC GAM, headquartered in Toronto with the operations based in Minneapolis, employs 180+ in the US and has about CAD $370 billion AUM. When asked the question about finding a firm that is a good fit, Scott provided the insight of “find a firm that shares similar values and philosophy you have as it will be the best fit.”

Director of Research Tasks

There are many responsibilities that a Director of Research has, but our speakers were able to provide some of their main tasks and favorite aspects of each day.

  • Investment Process
    • Including, but not limited to, managing investment tools and resources, generating and screening for new investment ideas, and assisting with portfolio construction and allocation.
    • Facilitating information between analysts and Portfolio Managers and running attribution to determine where returns in the portfolio are coming from.
  • Team Management
    • Managing the relationship between Portfolio Managers and analysts.
    • Hiring the people that fit with the team and firms philosophy and training new staff.
    • Performing Human Resource functions.

As a Director of Research, there are numerous opportunities to improve processes, develop the next generation of professionals, and have an impact on investment performance and client results. However, this career also has its challenges and pressures for returns, time management, and determining what is a fad and what is a true innovation.

Things to Consider

Our speakers provided some guidance not only on how to become a Director of Research but to start a career in investments. A good candidate will have:

  • High ethical standards, intellectual curiosity, expertise in investment process and theory, and strong writing and communication skills.
  • Ability to teach oneself to use the tools used in the investment process.
  • Desire to read investment books.
  • Passion to find a firm that shares their same philosophy.

Societies 2.0: CFA Institute Delivers More Than Just Exam Results

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By: Tom Crandall, CFA, CAIA and Kate Lyons, CFA – CFA Society Minnesota Board Members

Intrigued? You should be!

Recently, the CFA Institute hosted delegates from societies around the globe to share details on the progress around their latest initiative, Societies 2.0.  Representing the CFA MN Society, Board Members Tom Crandall and Kate Lyons joined Executive Director Mark Salter in Vancouver to learn more about this initiative and how it will add value to our members.

As the name implies, Societies 2.0 is the Institute focusing on societies in a different way than the it has before.  Recognizing societies are experts in their own market and understand their members best, the Institute is looking to support the societies in all their different and unique initiatives by promoting the highest standards in ethics, education, and professional excellence.  In turn, this partnership will transform the society/institute relationship into a professional body rather than a group of test-passers.

We’ve outlined the three objectives that the Institute will focus on –

  • To develop future professionals through relevant and accessible credentialing programs, high

standards of entry and professionalism

  • To deliver member value that accelerates the professional success of our members and that

continues to develop educated, ethical members at the top of their profession

  • To build market integrity that benefits investors and our members that serve them

So what does this mean for you?

The CFA Institute has committed both financial and human capital resources in order to support the initiative.  A key element to the success of this initiative is to reduce the volunteer burden and increase operational consistencies at the society level. Beginning this year, the societies will begin to receive increased funding that can be used to reinvest in the society infrastructure.  Externally, the Institute is proactively advocating by engaging policy makers and regulators through leadership projects aimed at influencing perspectives. Actively engaging on industry shaping discussion such as Uniform Fiduciary Duty and capital markets issues such as fintech regulation, the Institute is finding a seat at the table and better able to represent societies and Charterholders as a whole.

The CFA Society of Minnesota is a society that is well known for our programs, innovation, and engaged members.  Sure, we already knew that but our strong midwestern sensibilities keep us from really acknowledging this fact, out loud (being transplants, we feel no uneasiness in highlighting!).  We believe that the society is in an excellent position to benefit from this new initiative and provide new value and better experiences for our members.

We are excited to explore what these new relationships mean to our local society and how we can leverage these additional resources from the Institute.  Should the Compensation Survey be a national effort?  How can we better engage with our Federal Reserve Bank?  What type of professional education/career development do our members want? Is there a way we can give back to our community? These are just some of the questions that can be considered and we are looking for your voice in the discussion.  Keep an eye out in coming weeks for additional information and a special request for your thoughts and interests!

Day in the Life of An Equity Analyst Event Recap

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By John C. Bird, Operations Analyst at Nuveen Asset Management and CFA Level II Candidate

Day in the Life: Equity Analyst, featuring Andrew Rem, CFA and Paul Dwyer, CFA

Day in the Life featuring Andrew Rem, CFA and Paul Dwyer, CFA

Interested in pursuing one of the investment world’s most exciting careers? On September 21st, a group of professionals and students listened to Andrew Rem, CFA and Paul Dwyer, CFA talk about their experience as Equity Analysts. Over the course of lunch, our speakers shared with us their backgrounds, what they do on a daily basis, important lessons they’ve learned, and even some tips on breaking into this extremely sought-after career.

Background

Our speakers: Andrew Rem, CFA and Portfolio Manager of Small Cap Value Fund at Nuveen Asset Management, and Paul Dwyer, CFA and Senior Research Analyst at Punch & Associates, did not start out life knowing they wanted to be Equity Analysts. Andrew spent some time in Retail management, while Paul did a stint in Investment Banking before finding their passion in Equity research and analysis. Both men have found they are value-oriented in their investment approach, and that they prefer small and (in Paul’s case) microcap companies when looking for investment opportunities. With Nuveen being part of TIAA, a multi-billion dollar financial services company, and Punch being a 15-person, employee-owned, RIA, with ~$1 billion under management, you could say Andrew and Paul work in opposite ends of the spectrum when it comes to firm size and organizational structure. However, Andrew and Paul cautioned their young listeners not to be picky when trying to break into the industry. “Just get a job with a firm, large or small, and develop your craft first. Once you are in the ecosystem, then you can worry about firm size, investment style, and the like.”

Tasks of an Equity Analyst

It presents a unique challenge when summarizing a “typical day” in the life of an Equity Analyst, because no two days are the same. However, our speakers were able to broadly summarize an analyst’s duties in the following categories:

  • Research at the Office
    • Includes reading, financial modelling, making / talking to industry contacts, Peer / Competitor reviews, Management calls
  • Travelling
    • Includes Industry / Investment conferences, field trips to companies, and Investor days
  • Activities around Earnings Season
    • Includes listening to Quarterly/Annual calls, updating models / forecasts, reporting on company given updated information

While all this might sound fun, it is important to remember that being an Equity Analyst is not a “9-5” job, and with little oversight from supervisors, one must be a self-starter, highly motivated, and interested in the work to succeed. The best Equity Analysts have a process.

Investment Process

Our speakers stressed the importance of having a repeatable Investment Process. “Focus on creating and then improving your process,” Paul encouraged the audience. “A good process will yield good results over time, while no process is no better than gambling.”

The speakers went on to describe the typical process in researching investments will often have the following steps:

Source -> Research -> Pitch -> Decide -> Monitor -> Close

Andrew recommended having an independent view and being skeptical of the “consensus” when analyzing and forming an opinion on an investment. “It’s only by doing something different, and zigging when the market zags, that one can expect to outperform over the long term.”

Food for Thought

Not surprisingly, given the exciting, intellectually stimulating, and often financially rewarding nature of the work, it is very competitive to break into and analyst positions don’t open up very frequently. Our speakers shared some of their recommendations on breaking in. These included:

  • Study for and obtain your CFA Charter
  • Be active in the stock market. Manage your own portfolio of investments and have a reason for why you own what you own.
  • Get to know your local investment community. Be active in the CFA Society of MN and in your Investment Club on campus (if applicable)
  • Demonstrate an interest and a passion for investing. This is a tough business and only a genuine love for the trade will get you through the tough stretches.
  • Attach an Investment write-up to your resume and cover letter when you go to apply for an open role. Even if you are wrong about the investment, this will demonstrate you are thinking about your investment decisions and will help you stand out in an interview.
  • Follow professional investors, read books and articles on investing, ask to shadow professional investors, and be persistent! The journey is part of the fun!

A special thanks to Andrew, Paul, and all the members of the CFA Society of Minnesota that make events like this one possible. Now it’s time to get out there and invest! Cheers! Be sure to check out upcoming Day in the Life events on our events calendar.

Changing Perceptions Interview with Carol Schleif, CFA – Deputy Chief Investment Officer

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Carol Schleif is everything a role model for young professionals should be. With her dedication and go-getter attitude, Schleif has swiftly climbed the financial ladder to her current position as Deputy Chief Investment Officer at Abbot Downing; which was recognized as The Best National Private Asset Manager by Family Wealth Report Awards in 2016. But, where did her career in the financial industry start?

While studying equestrian science at William Woods University with hopes to become a horse trainer, Schleif decided to explore other options and found herself fascinated with her economics and marketing classes. In ‘83 she had graduated in an impressive three years with two degrees: one being equestrian science, the other being business administration.

She landed her first job as an Administrative Assistant with Edward D. Jones in Missouri. One of her more interesting duties for this position was clipping obituaries from local newspapers to prospect widows. “Not for me,” she decided. One thing Schleif did take away from this position was that when she had to make calls to the home office, she noticed, “The only people that ever knew what was going on were the folks in the research department.” So she decided to move home and pursue her interest in research departments.

Schleif then almost immediately started her next job at Piper Jaffray as a Market Strategist and started working on her Chartered Financial Analyst designation right away. After three years of industrious dedication, she distinguishably passed her CFA exams in ‘86.  When it was time to move on from her position at Piper in ‘87, she went on to work various positions such as Vice President and Research Analyst for First Trust, Director of Research at John G. Kinard & Co., and ultimately recruited by Lowry Hill, Abbot Downing’s predecessor, and has been there ever since. Schleif strived to incorporate her interests in economics, writing and strategy into her various positions. Along the way, she also stressed the importance of a well-developed research department and the respect it could bring to the company. It is clear to see that with each position, Schleif both learned more about the industry and contributed to the betterment of each company.

Where is Schleif currently at in her career and how was she been so successful?

Schleif currently holds the important position of Deputy Chief Investment Officer at Abbot Downing. Some of her duties include: creating and communicating the firm’s Asset Management Strategy, managing client relationships, and business development. On top of this, she serves on the firm’s Asset Allocation, Investment Themes, Investment Governance, Editorial and Publications Committees. She is a published writer and in 2016 was a Top Women in Finance Honoree. After having a conversation with her, it was obvious to see how much Schleif truly loves and is passionate about her job. She says, “I love my job. It’s a fascinating business and I feel fortunate to be able to do it here in the Midwest.”

In addition to her passion, her merit has contributed greatly to her success. She distinguishably graduated as Valedictorian of her high school class and Salutatorian of her college class. Schleif also stresses the importance of reading. Every day, she reads a variety of material such as Psychology Today, The Financial Journal, local papers, and New York Times. Schleif describes herself as a planner and goal setter. She explained, “Every year I try to look at what I’ve done and what has worked and what hasn’t. Then, I try to get better.” She even sets her computer password to a goal or aspiration she has, so every day she is reminded of it.

What has it been like to be a successful woman in the male-dominated financial industry, and what kind of advice does Schleif have for young women pursuing similar careers in investments?

Schleif sees a substantial benefit of being a woman in the world of investments. She says, “We bring a whole different level of analysis and emotional intelligence, skills and perception.” Nowadays, with more and more companies focusing on cognitive diversity, it is important to have women bringing their strengths into the investment field. However, Schleif believes a significant reason why more women are not pursuing these types of careers is because there is not a “cool depiction” in the media of women in financial positions. She points out that the only fun female role in “The Wolf of Wall Street” is Margot Robbie in a bubble bath.

While there is a substantial need for women in positions such as Wealth Managers, Asset Managers, and Advisors, they are not pursuing these careers. Schleif states, “The growth of women in the financial industry has been flat compared to other industries. We need to get the message out there that these really are viable careers.” She has been discussing with other women in the industry on how to get this message out and inspire women to consider these positions. As a grandmother to three granddaughters, Schleif strives to set the example that women really can be successful in this industry. Seeing the growth of women in the industry remain flat, and with her granddaughters as inspiration, she says, “I don’t dare retire until we move that needle a little further.”

What final advice does Schleif have for young professionals seeking jobs in the financial industry?

As a mentor with CFA Society Minnesota, and a member of the Board of Trustees at the College of Saint Benedict, Schleif is passionate about helping young professionals get started in their careers. She has a lot of hope and sees considerable potential in these younger generations.

One of her favorite quotes is, “Long days, short years.” While approaching 35 years in the industry, she explains this as the perception that some days can feel never-ending, especially when clipping obituaries from newspapers. However, 35 years, several positions, multiple publications, three children, and three grandchildren later, the time surely does seems to fly. So, as Schleif has modeled, do what you love and what you are good at, and don’t forget to enjoy it along the way. Success will follow, as it has clearly done for her.

 

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.

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.