Portfolio Management Class Graduates Bullish Students

Craig Rennie, an assistant professor of finance at the University of Arkansas, has a list of median annual incomes for chartered financial analysts tacked beneath the nameplate at his office door. It reads:

• Southwest=$155,000
• Midwest=$170,000
• West=$190,000
• Northeast=$255,000

The posting serves as a motivator to his Walton College of Business students, he said. He’s big on encouraging pupils to pursue the CFA designation, he said.

Rennie is in his third year of teaching the Portfolio Management class for finance seniors. The Rebasman Fund the class manages is worth more than 11 times its initial $100,000 endowment from Raymond Rebsamen in 1971 — a fact he attributes to his students and the rebounding economy.

Alumni of the class are working for the likes of Raymond James Financial Inc. of St. Petersburg, Fla., Stephens Inc. of Little Rock, and J.P. Morgan Chase & Co. and Morgan Stanley, both of New York.

Rebecca Garner, president and chief investment officer of Garner Asset Management Co. in Fayetteville, said the students coming out of the class are “without question, ready to work hard.”

Garner talked of the previous faculty advisors to the class, James Rimbey and Robert Kennedy, but said Rennie has taken the course to another level.

Right now, the class is bullish on the economy, with only $5,864 in money market funds, or cash, and the rest of the fund fully invested in equities. The economy looks like it did in about 1991, Rennie said, and barring a catastrophe, it should continue upward for the next five to seven years. That’s per the historical business cycle, he said.

As of Oct. 5, the Rebsamen Fund balance was $1,145,677.77, the highest he’s personally seen. He’s seen it dip as low as $720,000, he said.

The fund had an ending balance of $1.32 million for calendar year 1998, according to historical data Rennie’s class compiled.

For calendar year 2003, the fund beat the Standard & Poor’s 500 index by 2.1 percent with an annualized return of 30.5 percent. The S&P 500 had a 28.7 percent annual return. That beat about 85 percent of the paid money managers in the country, Rennie said.

The six-hour, one-year course is limited to about 12 of the best students in the finance department. Rennie said about one in three who apply actually gets in.

At the beginning of the year, each student is assigned a job as an analyst in one of the ten S&P 500 sectors, as a portfolio manager or as the economist. Other than some cross training for experience, they remain on the job the entire year, he said.

Rennie requires students to watch CNBC’s Kudlow & Cramer and Louis Rukeyser’s Wall Street not only for the information they can glean from the broadcast, but also to watch the polish on the guests’ presentations. He constantly harps on professionalism from keeping a tidy workspace to proper punctuation to succinct presentations, he said.

Rennie said he pushes his students to bridge the gap between academia and the real working world. He constantly tells them to take initiative and to “schmooze.”

Jody Staggs is a former student who landed a job as a research assistant with Raymond James.

Staggs said the course helped ready him for the real world by learning to concisely lay out an argument, how to write reports and how to stay on top of news.

“Dr. Rennie pushed us to pursue the CFA designation which has been invaluable,” he said.