Tag Archive for: CFA

Links for investment industry job hunters

Next week I’ll publish some insights from recruiters on the hiring environment for folks in the investment management industry.

Meanwhile, here are some links for job hunters from Charlie O’Neill of MutualFundCareers.com:

Related post: Who’s hiring CFA charterholders?

Susan B. Weiner, CFA

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Copyright 2008 by Susan B. Weiner All rights reserved

New GIPS standards will change the rules for marketers of separate accounts

Marketers of investment strategies marketed using performance composites will have to learn new recommendations and rules once GIPS 2010 goes into effect. If you’re a reader of marketing materials for separate accounts, you will find new information to digest.

GIPS is short for Global Investment Performance Standards. The next draft of GIPS standards will be issued for public comment in early 2009, with new standards to be issued in early 2010 and to become effective on January 1, 2011, according to a presentation on “GIPS Update: What to Expect in 2010” by Sunette Mulder, chair of the GIPS Executive Committee and Investment Manager Subcommittee, and Karyn Vincent, chair of the GIPS Interpretations Subcommittee. They spoke at the CFA Institute’s GIPS Standards Annual Conference on Sept. 25.

I nodded my head when Vincent said that common practice in the U.S. is to show 10 years of investment composite performance and to drop off the eleventh year once an additional year of performance is completed. I remember salespeople gleefully anticipating when a bad year would drop off the bar graph.

However, the draft of GIPS 2010 will recommend that firms show more than 10 years of history. That was just one of many points made by Vincent and Mulder. 

Another change that will impact marketers: the composite description must be expanded to include “enough information to understand all of the key characteristics, including risks, of the composite strategy.” Apparently it was felt that firms don’t adequately discuss risks.

Speaking of risk, another innovation is to require disclosure of a risk measure such as standard deviation for the composite and the benchmark for the most recent three-year period. If standard deviation isn’t the best risk statistic, you may show additional statistics.

If you don’t like what you’re hearing–or if you think some of these ideas should definitely get implemented–remember you’ll have an opportunity to give feedback on the draft of GIPS 2010. You can keep up at the GIPS Standards website.
Susan B. Weiner, CFA

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Copyright 2008 by Susan B. Weiner All rights reserved

Better client reporting on investments is coming, says speaker at GIPS conference

Better client reporting on investments is on the horizon, according to “The Future of Performance Measurement,” a Sept. 25 presentation by Stefan Illmer, head of client reporting for Credit Suisse, at the CFA Institute’s GIPS Standards Annual Conference in Boston.

There is “increasing pressure to provide analytics…from the client’s point of view” in addition to providing them for the portfolio manager. That translates into:

  • Providing the money-weighted rate of return, which is the client return, rather than simply the time-weighted rate of return
  • Using analytics to address where absolute profits are coming from in addition to analyzing returns vs. the benchmark; this is especially true for private clients

Illmer also foresees more reporting for clients’ total portfolios, incorporating clients’ externally held assets such as real estate, private equity, assets held with other custodians, and advisory accounts.

An audience member asked how firms can aggregate client portfolios for look-through given the 90-day delay in mutual funds reporting their holdings. Illmer replied that the data exists because it is used for daily net asset value calculations. He believes that pressure from clients may eventually win the release of this data.

For a related post, see “Financial crisis will change client reporting, according to Credit Suisse executive.”

Susan B. Weiner, CFA

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Copyright 2008 by Susan B. Weiner All rights reserved

Financial crisis will change client reporting, according to Credit Suisse executive

In response to my question about how the current financial crisis will impact performance measurement and reporting, Stefan Illmer, head of client reporting for Credit Suisse, said that the investment industry needs standards for client reporting

He said he wasn’t referring to performance reporting to clients, but to a broader array of topics such as valuation, pricing, transparency, and disclosures. 

For example, if a firm regularly runs return attribution software, it will immediately notice when a bond defaults because there will be no price for the bond. Of course, that assumes that the firm doesn’t let the portfolio manager define the price for the bond.

Illmer answered my question during the Q&A section of his Sept. 25 presentation on “The Future of Performance Measurement” at the CFA Institute’s GIPS Standards Annual Conference in Boston.
Susan B. Weiner, CFA

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Copyright 2008 by Susan B. Weiner All rights reserved

Who’s hiring CFA charterholders…and other job search tips

Who’s hiring?

Evergreen Investments and Leerink Swann are among those hiring, according to their representatives on a panel called “Talent Search Professionals Uncensored” at “Investing in Your Career,” a CFA Institute program held in Boston on September 23.

Some firms will always hire in down- as well as up-markets, said Bob Gorog, a partner with CT Partners, an executive search firm. Certain areas are stronger than others, in his experience, including:

  • Senior risk professionals and international (especially frontier markets) portfolio management professionals
  • Client-facing professionals, especially those who can make clients feel better
  • Alternative investments professionals

Sascha Bernitsky, a senior recruiting consultant with Evergreen Investments, echoed Gorog’s comment about interest in international and alternative investments. Evergreen is also interested in fixed income professionals who have managed through market turmoil, he said.

Investment banking firm Leerink Swann especially likes job candidates who combine health care and financial expertise, said Alice Avanian, associate director of equity research. 

More job hunting tips for investment professionals

These three panelists offered additional job hunting tips. Here’s what I took away.

  • Make it easy for recruiters and hiring managers to see how you fit their opening. In addition to your resume, craft a cover letter that highlights how your expertise makes you the best candidate for the specific opening for which you’re applying
  • Prepare for your interview because your oral communication skills are more important than ever as investment professionals spend more time in front of clients.
  • You can turn your failures to your advantage. Bernitsky looks for candidates who can talk about how they learned from a failure.
  • Have plenty of references. Gorog said some of his clients are asking for seven to 10 references, although they may only call three to four of them.
  • Social networking can help–or hurt. Bernitsky has used LinkedIn to search for hard-to-fill positions. On the other hand, be cautious about posting personal information on sites like Facebook because your name will be Googled, said Gorog.

As for your written communications, consider the following.

  • Proofread and critique your letters and emails. Automated spell-check is not enough. Bad grammar can automatically disqualify you, said Avanian and Bernitsky. Also, a friend who reads your cover letter can objectively assess how well the letter makes your case.
  • Write a strong email subject line. For example: “small cap equity analyst–resume of Bob Johnson.” It’s important to include the title of the position you’re applying for.
  • Don’t bury the name of the person who referred you. Bernitsky said he’ll be sure to read your resume, if you mention the person who referred you at the top of your email. Presumably the referrer should be an employee of his company or someone he knows.
  • Resumes should run two pages or less, and be laid out in a reader-friendly style.
  • Send a thank you note within 24 hours. Either email or snail mail is fine, said Avanian.

Good luck with your job hunt!

Susan B. Weiner, CFA

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Copyright 2008 by Susan B. Weiner All rights reserved

Are buy-side analysts inferior?

Buy-side analysts aren’t as good as sell-side analysts. At least not in the opinion of some researchers.

“…buy-side analysts made more optimistic and less accurate forecasts than their counterparts on the sell side,” according to “Buy-Side vs. Sell-Side Analysts’ Earnings Forecasts,” an article by Boris Groysberg, Paul Healy, and Craig Chapman of Harvard Business School in the July/August issue of the Financial Analysts Journal.  

“The performance differences appear to be partially explained by the buy-side firm’s greater retention of poorly performing analysts and by differences in the performance benchmarks used to evaluate buy-side and sell-side analysts.”

Do you buy the authors’ conclusions?  

As of August 19, there’s a poll on the right-hand side of this blog that will let you vote on the accuracy of buy-side vs. sell-side analysts. It’s a temporary poll, so vote now! If you think the issues are too complex to be addressed by a poll, please add your comments below.

A CFA favors longevity annuities

Longevity annuities may make sense in the eyes of at least one CFA charterholder.

“…individuals can have their cake and eat it too. They can buy longevity insurance for about 5–10 percent of their assets while investing and decumulating the remaining 90–95 percent!” according to a Canadian charterholder’s letter in the July-August issue of CFA Magazine (subscription required).

I’ve written previously about annuities. It fascinates me that they’re becoming more respectable.

Shifting emphasis at mutual fund distributors

The rising importance of fund selection units at broker/dealers (B/Ds) was reflected in the June 23 NICSA General Membership Meeting‘s panel on “The Distribution Road Ahead and Back,” chaired by Marty Griffin, director of sales operations for Pioneer Funds Distributor.

Mutual fund distributors are ramping up their efforts to satisfy those units. For example, two-and-a-half years ago MFS Fund Distributors set up an Advisory Resources Group that’s dedicated to servicing analyst teams performing due diligence at B/Ds, said Jim Jessee, president, MFS Fund Distributors. Jessee said, it used to be that reps had the most point-of-sale influence. But now, increasingly, that role is offloaded to the analytic group in the home office.

Eaton Vance is taking an approach similar to that of MFS, said Matt Witkos, president, Eaton Vance Distributors. Those B/D analyst teams are increasing in influence, he added.

Even smaller firms like Pax World Management Corp. are feeling the change. There’s more of a need for communication through the home office, said Keith Bernard, senior vice president.

These mutual fund distribution executives’ employee requirements are changing, too. Analytical skills are more important than 10 years ago. Jessee is hiring more people with the CIMA or CFP credential. He has even hired a couple with the CFA credential, “though I’m not sure how many have the stamina to tackle that one.”

One millionth CFA exam

The CFA Institute has administered its one millionth CFA exam, according to a recent email from its president. About 119,000 registered to take the exam on June 7.

The CFA Institute’s reach sure has expanded since I took the exam. My CFA candidate number is under 12,000.


Podcasts from CFA Institute Annual Conference

The CFA Institute’s Annual Conference in Vancouver attracted record attendance. Now, you can listen to podcasts of some of the speakers, if you’ve paid for a Total Access membership in the CFA Institute.

As of May 29, you can listen to:

  • Building a Global Equity Portfolio by Lawrence S. Speidell
  • Prediction Markets: The Collective Knowledge of Market Participants by Justin Wolfers
  • From Beta to Exotic Beta to Alpha Behavioral Finance: What Good Is it? by Meir Statman, Arnold S. Wood, and Jason Zweig
  • Investment Opportunities in Energy by Henry Groppe
  • Investment Strategies to Exploit the Growth of China by Burton Malkiel
  • The Neuroeconomics of Surprise: How the Investing Brain Handles the Unexpected by Jason Zweig
  • Economic Prospects for the U.S. Economy from a Monetary Policymaker’s Perspective by Janet L. Yellen
  • Nurturing Innovation in an Asset Management Firm by Blake R. Grossman