SUMMER 2012 Investing in Your Career – Greater Sacramento Region Upcoming events : Jo Lee presented a guide to career paths August 22, 2012 n continuation of its goal of creating available in the field of manager research and CFASS Annual General I awareness of the CFA Charter in the selection, stating that skills potential employ- Meeting greater Sacramento area, the CFA Society of ers look for include being detail oriented and Sacramento held its career day at the Califor- inquisitive. She advised that student take ad- September 19, 2012 nia State University campus. The event pre- vantage of career networking events to im- sented important insights into today’s invest- prove their chances of getting a job after CFA Societies California ment management and finance industry in the graduation 2012 Investment Confer- greater Sacramento region and provided valu- Brian Hoblit helped the students understand ence - A look ahead able opportunities to network with local pro- the field of relationship management as it re- fessionals currently working in the field. It be- lates to commercial banking. He emphasized gan with an overview of the Chartered Finan- the importance of good financial analysis, criti- cial Analyst (CFA) program, followed by a job cal thinking, communication and decision Inside this issue: panel discussion on the various career paths making skills. He stressed the importance of an individual might consider in the field and Investing in Your Career building relationships through networking as a the current local job market. – Greater Sacramento gateway to obtaining that first job interview The diverse panel consists of some of the larg- Dan Delmore gave an insight into the recruit- Investing in Asia Across est employers in the greater Sacramento re- ment strategies at Intel, listing communica- the Capital Structure gion, including CalSTRS, CalPERS, Intel, Wells tion, partnering, team work, financial analysis, Fargo, Rabobank, and FolioDynamix. The pan- CFASS 7th Annual Golf elists consisted of; Roy Clothier, CFA, Invest- and problem solving as possible skills that Event ment Officer, CalSTRS, Dan Bienvenue, CFA, will be tested at different stages of the recruit- Senior Portfolio Manager, CalPERS, Dan Del- ment process. Responding to a question on the value of transitioning to an investment more, Strategic Controller, Intel, Brian Hoblit, Tactical Investing in management role for someone who has Risk On, Risk Off Mar- Relationship Manager, Commercial Banking worked in accounting and earned the CPA, he kets Group, Wells Fargo, Kyle Koelbel, CFA, Assis- tant Treasurer, Rabobank and Jo Lee, Invest- explained that the CPA adds to the skill set ment Research Analyst, FolioDynamix. and will prove invaluable for a successful ca- reer in investment management Total Membership 185 Roy Clothier gave a brief overview of the CFA Kyle Koelbel presented a comprehensive over- Regular Members 163 program and a detailed description of the CFA examination including strategies to improve a view of the origins and culture of Rabobank, Affiliates 22 candidate’s chances of success. He advised including possible roles for finance and invest- Charterholders 131 students to consider starting out with jobs that ments professionals. On the effectiveness of provide some investment related exposure as using personal success with stock research Non Charterholders 54 a way of acquiring qualifying experience re- and investing at job interviews as prove of fi- quired in obtaining the CFA Charter nancial abilities, he recommended simply us- Page 2 ing it as a way to show one’s interest in the field of finance and invest- ments. He re-echoed networking and building relationships as an ef- fective job search tool. Dan Bienvenue encouraged the students to work on how they apply judgment when faced with unique situations. He listed problem solv- ing, analysis and decision making as critical skills required in most jobs. He explained the increasing relevance of both technology and quantitative analysis in investment management and the growing need for applicants with coding, programming, mathematical and tech skills. Students had the opportunity to ask questions and learn more about the organizations represented during the Q & A session. In addition, there was an Some members of the Panel open networking session with HR representatives of some the compa- nies represented at the event. CFASS ANNUAL GENERAL MEETING Please come and join CFA Sacramento members on Wednesday, August 22nd at 3pm for the Annual Member Meeting and Social. This year's meeting will take place at the newly-renovated Crocker Art Museum in the Cemo Meeting Center, and is open to CFASS- regular members only. For directions and parking information, please go to http://www.crockerartmuseum.org/visit/parking-directions Participants interact with HR personnel from companies at This year's event will feature a keynote speaker, as we are pleased the event to be joined by Donald Luskin, CIO of Trend Macro and a weekly guest on CNBC's "Kudlow Report." Donald's presentation will follow the annual member meeting, where the bi-annual election of offi- cers and directors will be held Teresa Kong, PM, at Mathews Int’l Capital Management presents Investing in Asia Across the Capital Structure Teresa Kong is a Portfolio Manager at Matthews Interna- ueled by a combination of domestic wealth gen- tional Capital Management, LLC and manages the firm’s F eration and foreign investment, the growth of Asia Strategic Income strategy. Prior to joining Matthews in Asia’s bond markets is one of the region’s most important 2010, she was Head of Emerging Market Investments at and remarkable economic developments of the last decade. Barclays Global Investors, now known as BlackRock, and The region’s significant structural reforms have led to responsible for managing the firm’s investment strategies in steady upgrades in Asia’s sovereign credit ratings and bond Emerging Asia, Eastern Europe, Africa and Latin America. markets have experienced improvements in liquidity, trans- She developed and managed strategies spanning absolute parency and diversification. The presentation discussed how return, active long-only and exchange-traded funds. In addi- Asia bond exposure can help to diversify fixed income port- tion to founding the Fixed Income Emerging Markets Group folios as well as the region’s fixed income return drivers: at BlackRock, she was also Senior Portfolio Manager and credit, currencies and interest rates. Credit Strategist on the Fixed Income credit team. Previ- ously, Teresa was a Senior Securities Analyst in the High Yield Group with Oppenheimer Funds, and began her career Page 3 with JP Morgan Securities Inc., where she worked in the Structured Products Group and Latin America Capital Mar- kets Group. She received both a B.A. in Economics and Politi- cal Science and an M.A. in International Development Poli- cies from Stanford University. She speaks Cantonese fluently and is conversational in Mandarin. Teresa has been a Portfo- lio Manager of the Matthews Asia Strategic Income Fund since its inception in 2011. Teresa Kong proceeded by explaining the following common misconceptions about investing in Asia. Teresa Kong, CFA, Portfolio Manager, First — Best way to play Asia is not to play Asia at all. Do it Mathews Int’l Capital Management through some other larger asset class, like emerging mar- kets. This position in her opinion has lead to and exacerbated No consideration given to credit worthiness in fixed income the problem of under exposure to Asia in most investment index construction. With only 7% of international fixed income portfolios from both a GDP or asset and liability perspective. allocation devoted to Asia, she showed that the problem of She showed that on average current equity allocation to Asia fixed income is further exacerbated, because most market is about 15% of a typical equity portfolio, which when viewed capitalized fixed income indices are heavily weighted towards against the backdrop of Asia making up a third of global GDP countries with high debts, and ignores the credit worthiness (“a third of the Pie”) and contributing half of global growth, of these countries. This, she stated meant that these indices show the gross under-allocation to Asia in equity portfolios. were not really a true measure of investability. As an example she showed the breakdown of the JP Morgan Emerging Mar- She buttressed this point by highlighting IMF Global GDP ket Global diversified fixed income index, with Mexico, Brazil projections from 2010 to 2016, showing US and Europe GDP and Russia having the 3 largest weights. as a percentage of global GDP shrinking from current levels, while projections show Asia growing from its current 31% to Second — Asia is just a leverage play on global growth. She 40%, with Asia’s expansion fueled by sustained high growth debunked this misconception by articulating the importance in the next 5 years. external factors, such as domestic growth play in Asia’s de- velopment, stating that Asia’s capital market has deepened U.S fixed Income diversification Collapse. She also showed in the last 5 years. To further support her position, she that under-allocation to Asia is also a problem in fixed income showed that before the Asian crisis in 1997, Asia’s entire portfolios. This is because typically a lot of retail and Institu- capital market was worth less than half a trillion dollars. To- tional investors do not have high exposures to international day this figure has grown to 5.5 trillion dollars, an expansion fixed income securities, with a lot of them having over half of she attributes to the positive change in the supply and de- their fixed income exposures in the U.S. Even though there mand dynamics of the local market. has been a collapse in the diversification benefit of U.S fixed income from a risk return perspective since the global finan- She asserted that on the supply side, governments in Asia cial crisis.