INSIDE THIS ISSUE
Special Reports pg. 2-5
Presidential Message
Editor’s Note pg.2
CFA Society of
Chicago’s History pg.2
Annual Meeting pg.3
Board Profiles pg.4
Leadership Council pg.5
Exchange Forum with
Lou Holland pg.5
Luncheon Programs pg. 6-8
Featuring Jeffrey J. Diermeier pg.6
Featuring Gary Brinson pg.7
Featuring Richard Ennis pg.8
Career Management pg. 9
Show Me The Money
Candidate Services
and Technology pg. 10
Exam Grading
Wired For Success
Social Events
pg. 11
Happy Hour at Rivers
Post Exam Celebration
Membership pg. 12-14
Thanks to our Volunteers pg.12&13
New Members pg.14
Click on article title to
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SUMMER 2005
THE
EFFICIENT FRONTIER
CFA Society of Chicago
307 N. Michigan Ave. - Suite 800
Chicago, IL 60601
312-360-0382
www.cfachicago.org
CFA Society of Chicago
Presidential Message
Mark
Hutchinson,
CFA
My
focus for
2005-2006
will be on
promotion.
Written by:
Mark Hutchinson, CFA
Progress with change,
not without it!
Our society’s growth over the
past five years flows from our
willingness to make hard
decisions breaking with
precedent. This momentum
isn’t going to slow-if anything,
the pace will quicken.
My focus for 2005-2006 will
be on promotion. We will
promote Chicago,
promote the membership,
lastly promote the
profession and in just that
order of importance.
Chicago needs a hedgefund
hotel located inside the loop.
There is simply no reason for
a world class city to lack a
pre-wired turnkey facility for
hedgefund
startups. For Chicago to
be a player in this growing
category of asset
management, such a resource
is essential.
Our Education Advisory Group
last spring provided a great
example of how we can
take it up a notch. It brought
a two-track, full day seminar
jammed with investment
luminaries to a packed house.
Past Chair Gautum Dhingra is
due the credit for having the
vision to see this event before
everyone else - including me!
He steps down from his role
like an undefeated heavyweight champion. I’m hopeful
that his successor Steve
Deutsch and the rest of the
committee will stage even
more superb events going
forward.
I’ll touch on the other
Advisory Groups later this
year. Know that each of the
Advisory Group chairs is fully
committed to enhancing the
value of your membership. 
REGISTER TODAY for our upcoming events at www.cfachicago.org:
September 16: “Industry Expert Conference”, featuring top-ranked Institutional Investor analysts.
Keynote speaker is Steven Levitt, author of “Freakonomics”.
October 26: “Annual Dinner”, honoring the newest CFA Charterholders and featuring Michael Lewis, author of “Moneyball”.
THE EFFICIENT FRONTIER
SPECIAL R E P O RT S
CFA’s History:
Editor’s Note
Written by:
Greg Gocek, CFA
Mid-year marks a New Year
for our Society, with the circulation of talent through our
leadership team. So this issue
of The Efficient Frontier presents incoming President Mark
Hutchinson’s themes for action
in 2005-06 and introduces the
new directors on our board.
And like the welcome of a
newborn,
this year also starts us out on
a special footing, as we enter
it with a new name, the CFA
Society of Chicago (CFASC).
Thus, we can look back on
the distinguished record of the
Investment Analysts Society of
Chicago (as Bill Gray’s article
reviews) with appreciation and
look forward to the creation
of further achievements under
our new identity. And in
keeping with that New Year’s
theme, our continuing swirl of
social activities and networking occasions show party hats
are always in style around
CFASC!
This issue’s contributors were,
alphabetically; Michael Falk,
Greg Gocek, Bill Gray, Mark
Hutchinson, Arch King, Judi
Malter, Jeff Nevins,
Jill Poznick, Jeff Sirkin, and
Matt Spitznagle. 
From the 1970s to Present
Reported by:
Bill Gray, CFA
The early 1970’s saw improved corporate disclosure, accounting standards, and educational
programs as salient matters for U.S. and Canadian financial analysts. The nature and enforcement of related regulations were also priorities, with the leading possibilities as regulators
being the SEC (or another federal entity), individual states or the profession itself.
1972-73 witnessed proposals for a New York state-licensing program for analysts, resulting
in extensive exchanges between FAF and its member societies, CFA Society of Chicago, the
New York City Society (NYSSA), SEC, New York Stock Exchange, and the New York State
Attorney General (NYAG). FAF developed a self-regulation plan endorsed by CFA Society
of Chicago and eventually adopted by the State of Virginia.
In February, 1974, NYSSA and the Rochester (NY) society with NYAG jointly introduced
legislation covering securities analysis practices in New York. Three years of intense debates
involving Mary Petrie (ICFA Chair, 1973-74) and Bill Gray (FAF Chair, 1975-76) ensued.
All local societies (excepting NYSSA and Rochester) adopted the FAF program. The NYSSA
elected new leadership opposed to state licensing. By 1977, NYSSA and Rochester joined
the FAF program.
One self-governance challenge was procedural redundancy, given separate governance and
committee arrangements within FAF, CFA Society of Chicago and the Research Foundation
(RF). Another was loss of autonomy. For years, periodic adjustments in cooperative arrangements were required. In mid-September 1987, a FAF plan was offered as a final solution. It
created AIMR and set uniform membership requirements for all FAF societies. “Regular”
members had to pass CFA Level I, or have 6 years of experience and 3 CFA sponsors.
Prior to plan adoption, it appeared NYSSA and Boston would be strong opponents.CFA Society of Chicago’s Board initially voted no, but shortly thereafter, CFA Society of Chicago’s
immediate Past President Mike McCowen (absent for the Board vote) communicated directly
with CFA Society of Chicago membership to advocate the plan. Ultimately, members voted
two to one for approval, adopting it January 1, 1990.
Functioning like a “holding company”, AIMR and its components (FAF, ICFA and RF) had
separate boards and committees, which proved untenable. Yet there was much resistance by
the three entities to loss of identity, all extant for 35-50 years. Jon Ender’s (FAF Chair, 199697) skills and persistence brought all parties together to resolution. In 1998, a 3-to-1 AIMR
member vote approved the merger dissolving its components.
By 2004, AIMR members approved the renaming to CFA Institute. Issues like
continuing education and the best developmental process to result in full
professional status are open future questions. 
PG. 2
SUMMER 2005
THE EFFICIENT FRONTIER
SP ECIAL R E P O RT S
June Annual Meeting:
Farewell IASC,
Welcome CFA
Society of Chicago
Pictured left to right: Executive Vice President Michael
Lindh, CFA; Immediate Past President Nicholas Ronalds,
CFA; CFA Institute CEO Jeffrey Diermeier, CFA; President
Mark Hutchinson, CFA
Reported by:
Jeff Sirkin, CFA
The final annual meeting
of the Investment Analysts Society of Chicago
occurred on the morning of
Wednesday, June 29, 2005.
It was also the first meeting
of the CFA Society of Chicago, as a motion to change
our group name to this new
title passed resoundingly. It
was noted that 84% of the
membership supported the
name change according to
a survey conducted earlier
this year.
Other matters approved
were the creation of a new
class of chapter membership and the nominated
slate of new officers and
directors. The new membership class will allow
students to join our society
through a separate application process.
Jeff Diermeier, president and
CEO of the CFA Institute,
attended and spoke at the
meeting. Jeff is also a member
of our society, having lived and
worked in our area for many
years prior to his new role. Jeff
noted the favorable discussion
earlier this year of the
CFA in The Economist and in
the Financial Times. The CFA
is described as the investment
profession’s gold standard
(additional details now available on our website). The name
change takes full advantage of
that brand recognition.
Michael Lindh, past secretarytreasurer and newly installed
executive vice president, commented on the excellent status
of our chapter’s financial statements. Our surplus increased
from $500,000 in 2004 to
$700,000 in 2005.
Finally, our current president,
Mark Hutchinson, spoke of his
vision for the upcoming year.
He emphasized the promotion
of our city, our society and our
profession.
Please note:
NEW WEBSITE
ADDRESS:
http://www.cfachicago.org/
Mark has many ideas including
the establishment of a hedge
fund capacity matching that
on both coasts. It would be a
way to keep talent in Chicago
instead of losing people to
either New York or California for better opportunities.
Another area of focus would
a review and possible change
in the investment policy of our
local chapter.
The energy from the annual
meeting suggests an ambitious
and prosperous year ahead
of us! 
PG. 3
SUMMER 2005
THE EFFICIENT FRONTIER
SPECIAL R E P O RT S
CFA Society of Chicago’s
New Leaders Are Installed
Reported by
Greg Gocek, CFA
Officially endorsed
at CFA Society
of Chicago’s
(CFASC) June
Annual Meeting, a
new slate of
directors has begun
to share their
wealth of
experiences and
skills on our
collective behalf.
Welcome on board!
In alphabetical
order by term of
office, here are
the diverse backgrounds of this
latest set of CFASC
decision-makers:
For one year terms ending June 30, 2006
Professor Werner De Bondt, CFA teaches at DePaul University where he is Director of
the Richard H. Direhaus Center for Behavioral Finance. A founder of the behavioral finance
specialty, he has taught at numerous universities, lectures worldwide, and has published
research in leading scholarly journals. A Ph.D. graduate (Business Administration) of
Cornell University, he has multiple Cornell degrees in economics, engineering and public
administration.
Sabrina P. Gracias, CFA develops new business in the Midwest as a Regional Director
of Russell Investment Group. She has previously worked in marketing capacities for State
Street Global Advisors and Stein Roe Farnham. Among her other volunteer activities is a
board membership with the Village Investment Fund, a global poverty investment fund cofounded by Professor Jeffrey Sachs of Columbia University.
Leo Harmon, Jr., CFA is a research analyst for Fiduciary Management Associates, focusing
on its small cap products with particular expertise in the financial services sector. Formerly
a portfolio manager at Allstate Insurance, he is a graduate of Bradley University and Duke
University (MBA) and has been active in various alumni volunteer capacities for Bradley.
Jeff Kelley oversees marketing and investment related communications at Calamos Investments as its Vice President of Investment Communications. He has held communications
roles at Nuveen Investments and was among the first team of mutual fund analysts at
Morningstar, Inc. Quoted widely in print and electronic financial media, he holds an MA in
English Literature from the University of Chicago and a BA from Kenyon College.
For three year terms ending June 30, 2008
Patrick C. Lynch, CFA is President of Chicago Equity Partners. Pat has been with the
firm since its’ inception and is currently responsible for business strategy and operational
management. Previously employed at Continental Bank and First Illinois Bank, he is also
an active volunteer leader for several educational and human service organizations including units of Loyola University. He is a graduate of Loyola University Chicago and DePaul
University (MBA).
Jose L. Santillan, CFA is Head of North American Client Services for ABN Amro Asset
Management and also Chief Investment Officer and Group Senior Vice President for LaSalle
Bank’s Wealth Management Group. His prior roles at ABN Amro involved managing offshore assets and institutional equity funds. He is a board member of the United Way Metropolitan Chicago. He graduated from the University of Illinois and DePaul University (MBA)
Elizabeth Jacobson Young, CFA has extensive experience in lease and project finance
investments with numerous firms including GE Capital’s Structured Finance - Global
Energy Group, Heller Financial, and Allstate Insurance. Active in many capacities at
the Investment Analysts Society of Chicago, she was Vice President of Member
Development. She graduated from Northern Illinois University and
the University of Chicago (MBA). 
PG. 4
SUMMER 2005
THE EFFICIENT FRONTIER
SPECIAL R E P O RT S
June 2 Investment Exchange
Forum with Lou Holland:
Leadership Council
Inaugural Meeting Energy Stocks
Reported by Jill Poznick, CFASC CEO
Reported by:
Created in 2004, the Leadership countries. Mr. Diermeier noted Jeff Nevins, CFA
that the ethical and profesCouncil provides former CFA
CFA Society of Chicago’s
sional standards upon which
Society of Chicago (CFASC)
June 2 “Investment Exchange
the organization was built are
leaders and current business
Forum (IEF)” hosted a theme
taking hold worldwide. Good
executives opportunities to
on large cap growth stocks
ethics is good business and
network, exchange ideas, and
with featured speaker, Lou
consequently, the CFA Charter Holland, managing partner and
contribute to the oldest investhas become a “global passment analysts society in the
chief investment officer of
country. The Leadership Coun- port”.
Holland Capital Management
cil held its first annual meeting CFA Institute is aware of the
LP.
in May, 2005.
negative perception of the
finance industry (“a profession Tracking a mock portfolio
Jim Stirling, CFA, welcomed
of the event’s stock picks
with elements of a business
Leadership Council members
certainly suggests the energy
turned into a business with
and provided background on
elements of a profession”) and sector is a hot growth opporthe CFA Society of Chicago
is working to change that. Mr. tunity - the June 2 portfolio
(formerly the Investment Anaone month performance is up
Diermeier noted it is incumlysts Society of Chicago). Mr.
bent on professionals to abide 3.4%, outdistancing the S&P
Stirling noted that CFASC is
the oldest investment analysts’ by standards and ethics. There 500 by 350 basis points. The
S&P 500 was down 0.1% over
society in the country (founded have been sweeping changes
this same time frame. Six of
to the regulatory system in
12+ years before societies in
the twenty stock picks on June
response to recent financial
New York and Boston) and
that CFASC’s membership has scandals, but regulation alone 2 were energy-related stocks,
or 30% of the initial portfolio
should not be viewed as a
doubled in the last decade to
panacea. It can stifle competi- cost basis.
3000 members.
tion and drain resources for
The heightened focus on
CFA Society of Chicago
monitoring and enforcing
energy by the participants
President Nicolas Ronalds,
ethical practices. Ultimately,
and outstanding stock perforCFA, provided an organizastrong corporate governance
mance would beg the question
tional overview. He noted
and ethical behavior deliver the on whether or not the energy
that CFASC’s mission is to
best results.
Kool-Aid is still safe to drink.
meet the professional needs
Mr. Diermeier appealed to the Nevertheless, top performers
of its members (Chartered
Leadership Council to reward include Suncor Energy and
Financial Analysts and other
Imperial Oil Limited, each
good behavior (give business
investment professionals) by
up over 18%, Valero Energy
to firms that employ CFA
creating programs, dissemiup 12%, XTO Energy up 8%,
charterholders, knowing they
nating information, providing
ConocoPhillips up 5%, and
espouse the Code of Ethics),
services to benefit members,
ChevronTexaco up 3%.
and promoting adherence to the punish unethical behavior
highest ethical and professional (move business elsewhere if
Discussion leader Holland
ethics have been violated), and
standards.
spotlighted the energy sector as
lean on the CFA Institute and
Jeffrey Diermeier, CFA, CEO
currently one of the best large
CFA Society of Chicago. As
of CFA Institute, visiting from
cap growth verticals for investleaders, this support will go a
its Virginia HQ, blended his
ment, with healthcare another
long way.
remarks to cover the current
favorite sector. He added that
markets and CFA Institute. CFA A full listing of the Leadership exposure to these areas can be
Institute is comprised of 75,000 Council members can be found achieved via exchange
members in 131 societies in 52 at: www.cfachicago.org 
traded funds (ETFs) such as
Vanguard Energy VIPERs,
instead of via individual stock
selection. He was also enthusiastic about the relative pricing
power in the insurance vertical
as another attractive area.
Finally, Mr. Holland and his
investment team offered two
stock picks: XTO Energy and
Avon Products.
Jeff Nevins, CFA, created a
mock portfolio tracking results
of the IEF suggestions. The
combined portfolio for both the
March 22 and June 2
events is up 2.4%. It has
underperformed 22 by 20 basis
points the S&P 500 (2.6%
gain) since March. The March
22 portfolio is cutting the combined performance, as it is up
only 1.4%.
The combined portfolio’s
two biggest losers include
Libbey Inc. (LBY), - 23%,
and OmniVision Technologies
(OVTI), - 17%. These loses
are offset by gains from Hayes
Lemmerz (HAYZ), + 31%,
MTS Systems (MTSC), +
16%, Ultra Petroleum (UPL),
+ 15%, and the aforementioned
energy stocks.
The combined portfolio holds
38 securities, assumes transaction costs of $200 per security
purchased, but does not incorporate tax consequences. 
PG. 5
SUMMER 2005
THE EFFICIENT FRONTIER
LUNCHEO N P R O G R A M S
February 16, 2005 Luncheon
Featuring Jeffrey J. Diermeier,
President/CEO of CFA Institute
Reported by:
Jeff Sirkin, CFA
Jeffrey J. Diermeier, president/CEO of CFA Institute as of
January 1, 2005, spoke on the current state of the CFA Institute and his vision for its future. IASC volunteer Nick Yoder
introduced Jeff.
The CFA Institute is constantly evolving innovative ideas
and services, striving to be a truly energetic, global organization. For example, Jeff recently visited Moscow to open CFA
Institute’s Russian office. It also has signed a new lease for its
New York City headquarters on Madison Avenue.
Ethical standards are a main organizational focus. A professional Code of Ethics, established 40+ years ago, has been
continuously renewed. An example of a recent extension is the
asset manager code of professional conduct, applicable at the
firm level. The code addresses loyalty to clients, investment
process, trading, compliance, performance evaluation, and
disclosure.
OTHER CFA INSTITUTE PRIORITIES INCLUDE:
1) Restoring/enhancing the profession’s reputation.
Quoting Jack Bogle from the 2/26/05 Financial
Analyst Journal Reflections Conference sponsored by
the Institute, “We’ve turned a profession with
elements of a business - into a business with elements
of a profession.”
2) Leveraging a rich organizational/professional history.
3) More closely integrating societies into the CFA
Institute business model.
4) Capturing the minds and souls of “youth”
(professional newcomers).
The institute can use size to advantage to lead our industry.
With 130 societies in 51 countries, we have a full-bodied voice
to be heard by SEC, FSA, and others, even on controversial
issues from the future of Social Security to mutual fund startups and hedge funds.
Education also matters to our knowledge-based profession.
Methods of effective, relevant post-graduate education for
the investment professional, appropriately certified (via core
generalist exams or specialist tracks, possibly reported via efficient, convenient PD diary) and delivered (either exclusively
from CFA Institute or via other sources) are under review. 
AS HIS CLOSING CALL TO CHARACTERHOLDER ACTION, JEFF EMPHASIZED:
1) Help CFA Institute maintain its excellent reputation
2) Be a part of the CFA community
3) Volunteer
4) Respond to CFA surveys
5) Push your firms and clients to: a) hire CFA
charterholders and CFA Institute members,
b) calculate performance using GIPS, and c) adopt
an asset manager code of ethics
6) Recruit young candidates, instilling in them the
importance of the CFA Program and its curriculum
5) Reaching out to employers (and their clients) to show
that “good ethics is good business”
6) Attracting all serious, qualified investment
professionals to our CFA community.
PG. 6
SUMMER 2005
THE EFFICIENT FRONTIER
LUNCHEO N P R O G R A M S
KEY FINDINGS FROM
35 YEARS IN THE BUSINESS
May 12, 2005 Luncheon
Featuring Global
Investor Gary Brinson
Reported by:
Greg Gocek, CFA
Gary Brinson, CFA, longtime authority as practitioner and
analyst of global investing and former chairman of the
Institute of Financial Analysts, spoke at the
Metropolitan Club on the investment industry’s future. IASC
volunteer Steve Franklin, CFA, introduced Gary.
Gary noted key findings from his 35 years in the
business, key findings on right.
In concluding Q&A,
Gary amplified several points:
A) Hedge fund fee structures are indefensible
vis a vis client interests
B) Annual asset payout ratios of 5% or higher are
too aggressive, yet unlikely to change soon
C) Recent corporate scandals may be dramatic, but
cutting corners is unsurprising. People are always
pushing the margins, with even Jack Welch engaged
in borderline illegal practices while micromanaging
GE’s earnings
D) Trying to exploit market lumpiness is a game most
should avoid, as rebalancing is necessary when it
feels most uncomfortable to do so (i.e. selling
dot coms in 2000)
E) Gary did not single out any global market opportunity
as especially compelling presently, although he noted
a likely bubble in short sub-prime mortgage lending.
1) Globalization of financial markets Multinational business activities transcend borders,
with competition best defined by presence in
industries/sectors, not nations.
2) International investing’s advantage- global
portfolios have a long history of yielding attractive
Sharpe ratios. Unlevered global portfolios are
appropriate asset holdings for investors of low
risk tolerance.
3) Momentum investing is a loser’s game it’s best classified as trading.
4) Investment decision models are increasingly
applied imprecisely - current inputs such as an S&P
nominal growth rate of 7-8% when historical real
growth is 1.8% show a lack of discipline and/or logic
in application. Relying on reported earnings
(instead of operating earnings) given repeated
write-offs is dubious.
5) Investor expectations diverge substantially from
experience- many institutional plans now operate
off exaggerated assumptions of 8.5% - 9.5%
nominal returns.
6) Investment management fees are excessive - in
aggregate, managers produce no value added, yet
fees are 5 times justifiable levels. A decline of
mutual fund equity fees from 150 to 10 basis points
plus a performance fee if successful is likely in the
next decade.
7) Lumpiness/discontinuities are endemic to investing the lion’s share of returns are realized in narrow
windows of opportunity when abnormalities can be
exploited. Clients prefer stable, smooth returns, but
that’s not in the nature of markets.
8) Past performance is basically random noise investor track records are random accidents.
Managers are best judged by their decision processes.
PG. 7
SUMMER 2005
THE EFFICIENT FRONTIER
LUNCHEO N P R O G R A M S
June 8, 2005 Luncheon Featuring Richard Ennis
1) When are
fees too high?
2) Are
managers
pricing
themselves
out of the
market?
Ennis labeled
the last 25
years as the
“Great Era of
Asset Gathering” in which
total
investable
assets grew
1100%
worldwide.
“Market Efficiency, Fees and Competition:
Are Investment Managers Pricing
Themselves Out of the Market?”
Reported by:
Michael Falk, CFA
At this Distinguished Speaker’s luncheon at the Union League Club, Richard Ennis, CFA
focused on the increasing costs of active investment management and the potentially
detrimental effects of these costs on managers’ ability to generate alpha. He posed two
key questions: 1) When are fees too high? 2) Are managers pricing themselves out of the
market?
With management fees in the mutual fund world significantly higher despite
increasing market efficiency, this has created a “paradox”. Specifically, Mr. Ennis labeled
the last 25 years as the “Great Era of Asset Gathering” in which total investable assets
grew 1100% worldwide. He characterized high fees as “the legacy of a seller’s market.”
During this period, institutional ownership - smart money - has also grown to a 50% share,
propelled via significant increases in information and communication technology, while
trading costs dropped 90%.
The key issue for Mr. Ellis was how fees should be considered. He suggested they should
be viewed within the context of manager skill versus investor success. The critical consideration is the probability of investor success based on assumptions about a manager’s skill
and their known fees.
Based on EnnisKnupp research positing active risk of 5% over a 10-year time horizon, in
order to have a 50-50 “coin toss” chance of earning positive alpha at a fee level of 1.5%,
the required manager skill would have to be 0.83. This derived probability represents a
manager exhibiting a high level of skill, with 1.0 being the equivalent of a functioning
crystal ball. The same even money chance for alpha at a fee level of 3% would require
manager skill of 0.97. So for vehicles with richly priced fee structures like hedge funds, the
challenge to deliver economically justifiable rewards to clients is substantial. Mr. Ennis’s
related skepticism was that they (hedge funds) “just don’t seem plausible.”
Mr. Ennis concluded with his outlook for investment management. He envisions greater
efficiency of markets, downward pressure on active management
pricing, increased market share for passive strategies, and a coming
“synthesis” of mutual and hedge fund strategies. 
PG. 8
SUMMER 2005
THE EFFICIENT FRONTIER
CAREER M A N A G E M E N T
“Show Me the Money”
Career Management Event on Compensation
Reported by: Judi Malter,
CFA - Career
Management Advisory
Group Chair
Over 100 IASC members and
guests took a summertime
schedule break to attend the
sold-out June 23rd Career
Management event, ‘Show Me
the Money’. Alvin Spector, of
Russell Reynolds Investment
Management practice in Chicago, shared key findings of
the recent investment industry
compensation report prepared
in conjunction with the CFA
Institute. Relying on his experience working closely with
CIOs, CFOs, portfolio managers, economists, credit analysts
and other financial service
specialists, he elaborated
on investment management
executive recruiting with tips
on keeping your compensation
aligned with new trends.
The event format provided
time both for networking with
other CFA Society of Chicago
members and for asking Alvin
individual questions. While
the vast majority of audience
participants felt they were
underpaid (perhaps a surefire,
if sacrificial, job retention
strategy!), the survey showed
that investment professionals
tend to have a fairly realistic
view of how they are compensated relative to their peers.
The report is based on the
more than 16,000 questionnaires returned from CFA Institute members, reflecting a 24%
response rate. Accessible at
www.cfainstitute.org, it offered
the following interesting findings per Alvin’s presentation:
“Compensation is on the
rebound, but has not yet
revisited its 2001 peak. CFA
Institute members with 10+
years of experience reported
2005 median total compensation of $240,000, comprised of
$147,000 median base salary,
$54,000 median cash bonus
and $10,000 median non-cash
compensation.
“Chicago median compensation, at $269,000, is above the
U.S. average but below New
York City ($400,000) and
Boston ($315,000).
“Across levels of experience,
women still earn less than men,
though the gender gap has
narrowed from 18% in 1999 to
13% in 2005.
“By type of assets,
investment professionals who
manage mutual fund assets
continue to earn the highest
compensation.
“By type of organization,
hedge funds continue to pay
the most, with significantly
greater incentive compensation
potential.
“Fixed income portfolio
managers and analysts “out
earned” their equity colleagues
for the first time ever in 2003.
That gap accelerated into 2005,
reversing historical trends.
“Currently, the most in demand
positions are in sales and
marketing across all asset
classes. 
How
does
it all
stack up?
Compensation is
on the rebound, but
has not yet
revisited its 2001
peak.
Chicago median
compensation, at
$269,000, is above
the U.S. average
By type of assets,
investment
professionals who
manage mutual
fund assets
continue to earn
the highest
compensation.
By type of
organization, hedge
funds continue to
pay the most.
PG. 9
SUMMER 2005
THE EFFICIENT FRONTIER
CANDIDAT E S E RV I C E S A N D T E C H N O L O G Y
The Chicago Connection to
Exam Grading
Reported by:
Greg Gocek, CFA
CFA Society of Chicago was
represented with distinction at
the recently concluded grading of more than 11,000 Level
III exams. Our members Tom
Coyle, Greg Gocek, Kathy
Hsu and Alan Meder were
among the carefully selected
group of CFA charterholders assembled from around
the world in Charlottesville,
Virginia for the two-week
session. Just as only a moderate fraction of exam takers
ultimately earn the CFA
designation, less than 10% of
applicants (CFA charterholders all) desiring to serve as
exam graders are assigned
that responsibility. Working in
focused teams on single questions, standards of consistency
and quality in exam review
are prominently emphasized
and followed. Once the
exam results are released by
summer’s end after concluding review by CFA Institute,
all candidates can be confident
their papers were treated carefully, fairly, and equitably.
Our society can look back with
special pride to this year, as
Alan Meder received a special
honor for his exceptional
service. Alan was one of only
two graders presented with the
annual Donald L. Tuttle Award
Special priority:
WIRED
for Success
Reported by:
Arch King, CFA
The Technology Advisory
Group supports the Society’s
members and management
across a variety of initiatives.
The web site and the member
database are special priorities. This year, we have again
enabled the other Society
Advisory Groups and given
members and the public
access to the best we
have to offer!
Functionally, we have added
“Contact Us” capabilities on
every web page. And each
quarterly newsletter is viewed
over 2,000 times - with more
than 1,000 of those views on
the first day it’s
published!
Kudos to my co-Chair, Raj
Patel, and our dedicated volunteer corps (in Tech and the
for CFA Grading Excellence.
The award is named for a
longtime CFA Institute leader
who continues to serve the
organization. All recipients,
of whom there have been
only 18 over the more than 5
decades of grading performed
by thousands of individuals,
share both a long history of
participation and demonstrated
leadership and commitment
to excellence in the grading
process.
Alan, a Senior Vice President
in Risk Management/Research
and CFO of two registered
investment companies at Duff
& Phelps Investment Manage-
ment in Chicago, earned his
CFA charter in 1988. He
noted that from the start of
his tenure there two decades
ago, his firm’s top management has emphasized that
all investment advisers are
fiduciaries who must adopt
professional norms defined
by ethical precepts and
educational standards. A
CFA exam grader continuously since 1990, he found
it most rewarding to receive
his award from Don Tuttle
himself. He is a graduate of
Cleveland State University
and Baldwin Wallace
College (MBA). 
2005 HAS WITNESSED:
1) 50,000+ site visits since January 1
2) 5,000 monthly views of the Job Placement opportunities
3) 15+% of our membership actively signing onto the site
(member number + password) every month.
other Groups) for these and
many other successes.
Next year, Mark King will
lead our Group. Good ideas
from fresh faces are always
welcome and needed, so feel
free to contact Mark. On the
horizon are: the Community
Involvement build out and
further contributions to
transparent
corporate governance at
the Society through sharing
an annual report along
with minutes from each
Advisory Group’s meetings.
So check the website for this
and more in 2005-06! 
PG. 10
SUMMER 2005
THE EFFICIENT FRONTIER
SOCIAL E V E N T S
Bastille Day:
Happy Hour
at Rivers
Reported by:
Matt Spitznagle, CFA
CFA Society of Chicago members took
advantage of the beautiful summer
weather at our latest Happy Hour reverie
on July 14 in Chicago at Rivers. While
it wasn’t the Seine River flowing by the
delightful venue, the gathering was
nonetheless tres magnifique!
Approximately 26 members (including
several who drove in from the suburbs)
enjoyed cocktails and appetizers while
networking and socializing with peers.
Most guests were enthused about participating at the upcoming Cubs game
(August 12th vs. St. Louis) and golf
outing (September 29th at Medinah),
excepting those who have not already
purchased their tickets, as those two
events sold out very quickly.
Just as financial traders can attest,
sometimes there’s no substitute for action
at the opening bell! 
Pictured left to right: Sean Conroy - Grosvenor Capital Management; Jennifer
Pedigo, CFA - Chicago Equity Partners;
John Simmons, CFA - Richards & Tierney
Weary
Canidates
Celebrate
Reported by:
Jill Poznick,
CFASC CEO
On June 4, more than
100 CFA candidates
joined CFA Society of
Chicago volunteers and
Stalla staff to celebrate
the end of a long day of
exams. For the second
year in a row, CFA
Society of Chicago
and Stalla invited all
candidates to a postexam party immediately
following the exam at
the Hyatt-McCormick
Place.
This year, free neck
massages were provided
by five professional
massage therapists.
Needless to say, the line
for the neck massages
even surpassed the line
at the bar! We hope all
those who attended the
party get good news
from Charlottesville
this fall. 
Candidates enjoy professional
neck massages following a
long day of CFA exams.
Pictured left to right: Dolu Olugbenjo, Candidate - Sprint, Carson Boneck, CFA - Quantitative Services Group, Jason Hans, Candidate
- Quantitative Services Group
Pictured left to right: Matthew Fox, Candidate
- JP Morgan Chase, Marcus Boggs, Candidate
- GE Commercial Finance, Lisa Metros, CFA
- Stalla
PG. 11
SUMMER 2005
THE EFFICIENT FRONTIER
MEMBER S H I P
Thanks to 2004-2005 Volunteers
CFA Society of Chicago
(CFASC) extends its
sincere appreciation to all the
persons, listed below, who as
volunteers on our committees
made things happen around
our society in 2004-05.
Our society name has
changed from IASC, but the
Annual
Dinner
Name
Jon P Denfeld, CFA
Barry Hollingsworth
Jeff Houston
Peter Kronas
Nikhil Majithia
Alex Olaru, CFA
John Osborne
Christopher Reed, CFA
Matt Reinbold
Patrick Rooney
Gary Silverman, CFA
John Simmons, CFA
Matt Spitznagle, CFA
Xinxin Wang
Yvonne Xu, CFA
generous efforts of all involved
will undoubtedly be a hallmark
of continuity for next year and
as far forward as the eye can
see!
All listed participants would
agree that there’s always room
for more when it comes to our
Hope you can join this high
performing team soon.
Please visit
www.cfachicago.org/meetings
to see the meeting
schedule for the 2005-2006
year.
Volunteer list continued on
next page 
Career Management continued
Firm
Shay Assets Management, Inc.
Stratus
William Blair & Company
Vantage Financial
Options Clearing Corp.
ABN AMRO
Harris Investment Mgmt
Citadel Investment Group
Zacks Investment Research, Inc.
Moody Investment Advisors
Richards & Tierney, Inc.
Northern Trust
Federal Home Loan Bank of Chicago
IBM
Candidate Services
Name
Carson Boneck, CFA
Michael Bartlett, CFA
David DeCoste, CFA
Betsy Jacobson Young, CFA
Firm
Charles Schwab Capital Markets
Bank One
UBS Global Asset Management
Name
Judi Malter, CFA
Ralph Cram
Kathleen Dugan, CFA
Marvin Goodwin
Jeremy Heer, CFA
Gary Knapp, CFA
Peter Kronas
Jian (Justin) Lu, CFA
Daniela Mardarovici
Ryan McGloin
Jeffrey Nevins, CFA
Firm
Fitch Ratings
Theatreplex Entertainment Prop
Northern Trust Company
Career
Management
activist base. So your response
to the recent e-mail soliciting
volunteer involvement or a
direct contact to an Advisory
Group chair, is definitely
welcome.
UBS Global Asset Management
Dunnottar Alternative Investment
CTS Corp.
Ilios Partners
Property Assessment Advisors
First Analysis
Name
Christopher Reed, CFA
Matt Reinbold
Seth Rosenthal
James Stirling, CFA
Marc Velasco
John Weber
Yvonne Xu, CFA
Firm
Harris Investment Mgmt
Citadel Investment Group
Harris Trust & Savings Bank
UBS
Bank of America
H&R Block Financial Advisors
IBM
C.F.A. – Cultivating Female Ambition
Name
Firm
Carmen Heredia-Lopez, CFA Fortaleza Asset Management
Rebecca Cook, CFA
Voyaguer Asset Management
Katrina Dee
Glenwood
Kathy Dugan, CFA
Northern Trust
Jodie Gunzberg, CFA
Ibbotson
Lori Holland
Lehman Brothers
Emily Li, CFA
Great Lakes Advisors
Michelle Maguire, CFA
Chicago Equity Partners
Judi Malter, CFA
Fitch Ratings
Daniela Mardarovici, CFA Ilios Partners
Lisa Metros, CFA
Stalla
Michelle Morano, CFA
First Analysis
Laura Stern, CFA P
rudential
Betsy Jacobson Young, CFA
Communication
Name
Firm
Greg Gocek, CFA
Eric Ause, CFA
Fitch Ratings
Patrick Carlevato, CFA
Factset Research Systems
Michael Falk, CFA
ProManage, Inc.
Mike Lindh, CFA
Richards & Tierney
Carmen Heredia-Lopez, CFAForteleza Asset Management
Uwe Schillhorn, CFA
UBS
Jeff Sirkin, CFA
Aon Risk Consultants
Kevin Waspi, CFA
University of Illinois
PG. 12 SUMMER 2005
THE EFFICIENT FRONTIER
MEMBER S H I P
Education
Name
Gautam Dhingra, CFA
Amy Barrett, CFA
Scott Bryant, CFA
Jim Butler, CFA
Arnold Davis, CFA
Steve Deutsch, CFA
Ron Ewing
Lee Hayes
Richard Huber
Polina Ialamova, CFA
Robert Kick
C
Joseph Knecht, CFA
Jeffrey Kocim, CFA
Joseph Liedtke
Mike Lindh, CFA
Ben Lum, CFA
Nikhil Majithia
Tomoko Matsuyama
John Osborne
Ashish Patel
Steve Riley Aaron Roberts, CFA
Michael Rybak, CFA
Krishna Soma
Rawley Thomas
Xinxin Wang
Kevin Waspi, CFA
Daniel Yeung, CFA
Firm
High Pointe Funds Management, LLC
Benefits 401, Inc
Bank One Capital Corporation
McDonnell Investment Mgmt
Accenture Corp Transation Svcs
Morningstar
Valuation Research Corp.
Investor’s Research & Asset Mgmt
vFinance Investments, Inc.
apital Forensics
Harris Trust & Savings Bank
RESIDCO
CNA Insurance
Richards & Tierney
Chicago Federal Home Loan Bank
Vantage Financial
ABN AMRO NA
KPMG
Efficient Capital
High Pointe Funds Management, LLC
Credit Agricole
Northern Trust Company
LifeCycle Returns, Inc.
Federal Home Loan Bank of Chicago
University of Illinois
Morningstar, Inc.
Finance
Name
Joseph Knecht, CFA
Michael Lindh, CFA
Sarah Hemmer, CFA
Job
Placements
Name
Sandford Boyce
Jason Carver
Stephen Casey, CFA
Lan ChenWillis
John Cooper
Ralph Cram
Alex Dumortier
James Glinski
Kevin Hacker, CFA
David Hess, CFA
Veena Jagannath
Phil Kain
Robert Kick
Gary Knapp, CFA
Dionne Lam
Firm
Harris Trust
Richards and Tierney
Firm
William Blair & Company
Bank of America
LightPoint Capital Management
HSBC Securities
Theatreplex Entertainment Prop
Banc One Capital Markets
Hull Trading Company
First Analysis
Leaders Bank
Capital Forensics
Dunnottar Alternative Investment
Job
Placements continued
Name
Mike Lindh, CFA
Ryan McGloin
Jack Murphy, CFA
Rahul Sawhney
James Stirling, CFA
S. Scott Usechek
Michael Welch, CFA
Gregory Witt, CFA
Firm
Richards & Tierney
Property Assessment Advisors
CSFB
Bank One
UBS
Susquehanna
Lehman Brothers
Bank of America
Luncheon
Programs
Name
Firm
David Frank, CFA
Liberty Wanger Asset Management
Michael Carbery, CFA
Brown Brothers Harriman
Jason Carver
Bank of America
Steven Franklin, CFA
Banc One Capital Markets
Sami Kamhawi
Goldman Sachs
Bradley Leak
Boeing
David Myszkowski
Northern Trust Company
Branimir Petranovic, CFA HFR Asset Management
Michelle RhodesBrown, CFAHolland Capital Management
James Stirling, CFA
UBS
David Watkins, CFA
Heitman Capital Management
Recruitment
Name
Derek Casteel, CFA
Sean Casey, CFA
Mike Nicolas
Brian Schuster
Alyssa Thyren
Betsy Jacobson Young, CFA
Social
Events
Name
Rebecca Cook, CFA
Jeffrey Kernagis
Jesse Levine, CFA
Stephen Moy, CFA
Branimir Petranovic, CFA
Christopher Reed, CFA
Technology
Firm
Shay Assets Management, Inc.
Stratford Advisory Group
PPM America
Evanston Capital
Firm
Voyageur Asset Mgmt
Seidman & Company
Bank One
HFR Asset Management
Harris Investment Mgmt
Name
Firm
Arch King, CFA
Northern Trust Global Investments
Rajesh Patel, CFA
Incapital, LLC
John Cooper
HSBC Securities
Stephen Gollins
The SAVO Group, Ltd.
Lee Hayes
Sarah Hemmer, CFA
Mark King, CFA
GE Technology Financial
Mike Lindh, CFA
Richards & Tierney
Jian (Justin) Lu, CFA
CTS Corp.
Alex Olaru, CFA
Options Clearing Corp.
Hristos Stavrou
Deloitte & Touche
Christopher Wittemann, CFAGofen & Glossberg, LLC
THE EFFICIENT FRONTIER
MEMBER S H I P
Name
Firm
Welcome
New Members
Anthony M. Adams
Bank of America
Craig V. Adkins
Credit Agricole - AIPS
Tariq K. Afghan, CFA
Bank of Montreal/Harris Nesbitt
William R. Andersen,
Jr., CFA
Andersen Capital Management
Darin R. Aprati
McDonald’s Corporation
Daniel G. Armstrong
Nuveen Investments
Kevin M. Becker, CFA Quarry Point Partners, LLC
Kapish Bhutani
Ennis, Knupp & Associates
David E. Bochenek
Huron Consulting Group
Eric A. Buchanan
Automobile Mechanics’ Local 701
David L. Catherall, CFA Bank of America
John H. Christy, III, CFA Thomas White International
Albert H. Chung
Allstate Investments
Scott M. Clancy
Citigroup Global Markets
Margaret A. Cline
University of Illinois Foundation
Adam I. Cohen
Stein Roe Investment Counsel
Julie M. Conner
William Blair & Co.
Matthew S. Dean
PPM America, Inc
Deborah J. Dileonardi
Russell Investment Group
Zinette Esmail
Breege A. Farrell, CFA Allstate Investments, LLC
Jonathon J. Fellows
DiMeo Schneider & Associates, LLC
Anthony A. Fout
Harris Bank
Valerie A. Gery
Calamos Investments
Andrew D. Greene
University of Wisconsin Foundation
Lu Guo, CFA
KPMG, LLP
Philip R. Guziec
Morningstar, Inc
Thomas Herr
Joel D. Hinkhouse
Lotsoff Capital Mgmt
Thomas M. Idzorek, CFA Ibbotson Associates
Richard J. Inzunza, CFA Northern Trust Global Investments
Laura J. Januzik
Robert W. Baird
Thomas M. Johannesen Ernst & Young, LLP
Geoffrey D. Keegan, CFA Grosvenor Capital Management, LP
Sinan Kermen
Citadel Investment Group, LLC
Jennifer L. Kofod
National City Bank
Samuel Kunz, CFA
Christopher R. Lakumb Cole Taylor Bank
Dionne YS Lam, CFA
Name
Firm
Mark E. Lanyon, CFA
Morningstar, Inc
Geoffrey M. Ligibel
Houlihan, Lokey, Howard & Zukin
Jack Liu, CFA
Ennis Knupp & Associates
Jason D. Lobel
Duff & Phelps, LLC
Jason T. Macatangay
Sanford Corporation
Brendan R. Mazur
Mercer Investment Consulting
Prateek Mehrotra, CFA Sumnicht & Associates, LLC
Sanyog Mehta
KPMG LLC
Rebecca Millrood
Lehman Brothers
Robert Murphy
LaSalle Bank NA
Michael M. Neska
Voyageur Asset Mgmt
Randal A. Noren
JPMorgan Chase
Steven J. Novatney
Citadel Investment Group, LLC
John W. Owens, Jr.
Makinson Cowell
Robert A. Parham, Jr., CFA
Nicholas B. Parrish
Grosvenor Capital Mgmt.
Joshua L. Passman
Citadel Inestment Group
David G. Phillips, CFA Goldman, Sachs & Co
Jeffrey B. Ptak
Morningstar, Inc
Donald C. Radtke
Investors Mgmt Group
Scot D. Ruhlander
Genesee Investments
Dan H. Rullman, CFA
Katja Schneider, CFA
UBS AG
John T. Schriver, IV
Harris Trust & Savings Bank
Matthew H. Schwerin, CFA
W.W. Grainger, Inc.
Narayan S. Shankar
Society of Actuaries
Steven G. Sprindis, CFA Investline Private Equity
Glen M. Stepanovic
PEB Financial Group
Ronald L. Strauss, CFA Pekin Singer Strauss Asset Management
Jin Tao
Ibbotson Associates
Ibrahim E. Tarcan
Ativo Research LLC
Peymon Torabi
Peoples Bank SB
Vikas Tuteja
Judy Wachtenheim, CFA Citigroup Private Bank
Jun Wang
Nicor, Inc.
Rong Wang
Scott Wentsel
Van Kampen Funds
Ylanda T. WilhiteHarris Trust & Savings Bank
PG. 14
SUMMER 2005