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University of Wisconsin-Eau Claire Financial Management Association Visit

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Written by Members of the University of Wisconsin-Eau Claire Financial Management Association 

The University of Wisconsin-Eau Claire Financial Management Association (FMA) takes time out of their regular class schedule to go on an annual trip to visit finance professionals in the Twin Cities. This trip gives FMA members an opportunity to see a wide variety of careers within the finance industry. This year FMA partnered with CFA Society Minnesota (CFAMN) to line-up firms for the students to visit in Minneapolis and St. Paul. CFAMN put together an outstanding day filled with real-life experiences. Students attended five incredible presentations from: Wells Fargo/Wells Capital Management, Nuveen Asset Management, Royal Bank of Canada, Mairs & Power and Northwest Area Foundation. We can’t thank CFAMN enough for giving our members this experience!

Nuveen Asset Management brought the group up to their executive conference room. Below is a list of the professionals FMA had the opportunity to learn from:

Andrew Rem, CFA – Vice President, Portfolio Manager, Senior Research Analyst
Sarah Wade – Senior Vice President, Co-Portfolio Manager
Laura Starr, CFA – Senior Vice President, Senior Research Analyst
Derek Sadowsky, CFA – Vice President, Portfolio Manager
Julie Lenarz – Assistant Vice President, Operational Manager, NAM Legal and Risk
Benjamin Duininck, CFA – Vice President, Senior Research Analyst

Hearing from each one of these individuals provided our group with key insights not readily available within the classroom setting. Some of these insights included:

  • How a research analyst’s day is never the same. Some days you are diving into spreadsheets and creating models or other days you are flying around the country visiting corporate executives.
  • The role of psychology in finance and understanding the emotions of the market.
  • The retail industry and how to think about companies when researching them.
  • The importance of tools such as FactSet and Bloomberg and selling within this industry.
  • How risk management and compliance are crucial in daily activities of the industry.
  • How much larger the fixed income market is than the public equity market, which was a shock to a lot of people.

We were able to hear from professionals that are in positions we hope to be in someday. It was exciting to hear about how their day-to-day activities correlate with topics we are learning in school and gave our group a lot to look forward to!

At the Royal Bank of Canada, we had a phenomenal opportunity to have breakout sessions and discussions with different parts of the firm. We heard from these professionals:

Marcia Morgan – Vice President, Business Technology
Christy Bipes – Senior Manager, Marketing and Communications
Josh Schettle, CFA – Sr. Investment Risk Analyst
Carol Kuha, CFA – Chief Operating Officer
Tiffany Mlsna – Analyst, Portfolio Administration
Kelly Foley – Junior Credit Analyst
Mindy Frye – Associate Portfolio Manager – Impact Investing
Nick Walstrom – Director, Product Management
Craig Bishop – Vice President, Lead Strategist U.S. Fixed Income Strategies Group
Sam Renikoff – Fixed Income Portfolio Associate
Bob Dickey – Technical Analyst
Peter Kolar, CFA – Wealth Management Consultant

The breakout sessions were an extremely valuable opportunity with departments including business technology services, portfolio management, fixed income, investment risk and performance department. During this session, we broke into small groups of four to six, and had the opportunity to meet with multiple professionals from these departments for 10 minutes. Many people enjoyed the opportunity, mainly because we had the chance to get to personally know everyone in each of the departments, walk through their day-to-day lives and ask them questions. They provided career advice, what RBC has to offer and possible careers with the firm.

The next session we had was a discussion with the wealth management group. We talked with a technical analyst, a research analyst and a financial advisor consultant. Many students took advantage of the opportunity as a way to see aspects of research and advising, which  led to a very positive, interactive and educational session. We talked about aspects such as understanding risk, what technical analysis is and what it is like to be an advisor. Overall, the students really enjoyed the opportunity to go to RBC. The firm was very engaging and interesting, and we would thoroughly enjoy visiting them again.

Our speakers at Wells Fargo/Wells Capital Management gave us an overview of several different jobs within the company.

Matt Grimes, CFA – Managing Director
Jeanine Sundt – Investor Relations Manager
Jake Seltz, CFA – Portfolio Manager, LT Large Cap Growth Equity
Kashi Yoshikawa, CFA – Senior VP, Regional Investment Manager

They talked about the company’s mission, principles, and goals for their clients. We learned about short duration fixed income, investor relations, large cap growth equities, building portfolios for clients, and maintaining client relationships. They also provided us information on the CFA Charter and the importance of having that designation in the industry.

Mairs & Power provided a unique opportunity to see a firm that doesn’t operate as the traditional investment firm. Seeing the unique hands-on and interactive investment strategy that they have incorporated for the past several decades offered insight that many students would not have had the opportunity to ever experience if it was not for the visit. This opportunity showed us that there are creative ways to create profitable investments year over year, and I know many of the members of our organization walked out with a more creative insight on investing. At Mairs & Power, we had the opportunity to meet with:

Ron Kaliebe, CFA, CIC – Senior Vice President and Director of Fixed Income
Allen Steinkopf, CFA – Co-Manager of the Mairs & Power Small Cap Fund
Kelly Trevenna – Equity Trader/Assistant Portfolio Manager
Heidi Lynch – Fixed Income Trader

Each member walked us through what they do daily and provided insight into the firm. The Q & A session was filled with great questions that provided a lot of knowledge to all our members. We are thankful for the opportunity to experience such an amazing company such as Mairs & Power.

At Northwest Area Foundation, we learned about what an investment director does on a day-to-day basis. Our speaker, Amy Jensen, CFA – Investment Director, is responsible for investing the foundation’s assets to make sure they can provide grant-making in the future. We also talked about the importance of behavioral finance and how to build an institutional investment portfolio. After the presentation, we were able to compare two potential investments and decided which one would be better for the company. Amy also touched on what the CFA Charter has done for her and what it is like to be a woman in the finance industry.

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.

Distinguished Speaker Series Featuring Bob Doll, CFA, CPA – Event Recap

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By Harvey R Peck, CFA

On Thursday, February 11, 2016, CFA MN hosted a presentation by Bob Doll, Senior Portfolio Manager and Chief Equity Strategist at Nuveen Asset Management. After a light dinner at the Minneapolis Club, Mr. Doll shared his highly respected views and perspectives on the global equities markets. You may recognize Bob Doll as a regular on CNBC, Bloomberg TV and Fox Business News with Doll being quoted in other business publications.

Vicious negative feedback loop
Doll opined the equity markets are in a “terrible funk”, a vicious negative feedback loop. As global growth estimates decline, oil prices drop, earnings estimates are revised down, stock prices fall, there is forced selling, credit standards tighten, then global growth estimates decline, and the cycle repeats itself.

How do we extract ourselves from this funk? Oil needs to stop going down. The U.S. dollar needs to stop appreciating. Problem: Oil and commodities are in a multi-year bottoming process.

Can the U.S. economy avoid importing these global deflationary trends?
Doll noted the U.S. economy is doing better than most other developed economies. It is primarily a domestic consumer economy. Doll is forecasting U.S. real growth at mid 2% and nominal GDP growth at 3-4%.

The U.S. consumer economy is doing relatively well as supported by strong new housing starts, firm home resale prices and record auto sales.The Federal Reserve’s inflation targets are within reach. Rising U.S. domestic inflation expectations is supported by two factors: (1) a tightening labor market showing upward labor price pressures and (2) housing rents and home prices increasing.

Bull market in bonds over
The bottom in yields likely occurred back in July 2012. By 2016 year-end, Nuveen forecasts U.S. Treasury yields to be higher. Doll expects high yield credit spreads to be narrower and yields to be lower by year end. Nuveen contends high yield spreads are currently overreacting to the declining creditworthiness in energy and materials. However, these factors should not affect other non-industrial areas of the economy such as medical, information processing technology and media. Currently the high yield markets have corrected too much and the correction was too fast.

Political Issues
The U.S. federal deficit improvement trend is over. Rising entitlement costs over the coming years will cause the deficits to expand. The growing deficit is not yet problematic. Investors are encouraged to wait until the government’s ability to service debt is rising faster than GDP before implementing defensive strategies.

The U.S. needs bipartisan congressional action to address the problem of corporate income taxes on foreign based earnings. The current tax law is fostering large capital outflows from the U.S. economy. This is a very important issue for the long-term viability of the U.S. economy.

Recommendations
Nuveen recommends overweighting allocations to equities, underweighting bonds and fixed-income and holding an overweight in cash reserves. They expect above average volatility. Most investors will be frustrated by the current environment of higher volatility and low returns.

We thank Bob Doll and Nuveen Asset Management for sharing their thoughts and recommendations. You can follow Bob Doll’s commentaries and other Nuveen Asset Management research publications at www.nuveen.com/home. Thanks again to Nuveen Asset Management for their support of CFA MN.