Cornell Business

Issue date: 5/3/00 Section: Johnson News

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As the academic year comes to a close, everyone is curious about their futures, their summers, and the weather. About 240 miles East of Ithaca, on Wall Street, the curiosity lies in what is going to happen to the financial markets. In case you haven't been following the market, the month of April has been pretty spectacular in terms of volatility. This year, the NASDAQ has descended from a high of 5132 to 3642. The DOW JONES is off its yearly highs of 11750 to 10844 (as of Thursday, April 20). What is going on?

Is the economy overheating? This year alone, the Dow is down 5.68% and the NASDAQ is off 10.45%. Further indication in the economic numbers show that the Federal Reserve will probably need to raise rates again to slow the economy and contain inflation. The Fed has already raised rates (target overnight interest rate) 5 times since June to a five year high of 6 percent. Still, concern over strong consumer spending and business investment as well as a rise in the employment cost index will probably result in further rate hikes ahead.

These are the challenges the Cayuga Fund managers face on a daily basis. It is not easy to outperform the indexes, but the student portfolio managers of the Cayuga Fund have been able to do so over the last 17 months, since the Fund's inception on December 1, 1998. In the calendar year 1999, the Fund was up 26.39%, well ahead of the S&P.

Results for the year 2000 are still, of course, unknown. But one thing is certain: there will be a changing of the guard. In about a month, the graduating class will include the 17 Cayuga Fund managers who have been adding value to the fund all year. Below is a list of the incoming portfolio managers and their sectors as well as the graduating class who have paved the way for the Cayuga Fund.


---GRADUATING AND INCOMING PORTFOLIO MANAGERS---

QUANTITATIVE STRATEGIES(new):
New Managers--Jonathon Baker

GLOBAL ADRs:
Graduating Managers--John Miwa,Tung-Chieh Liu
Incoming Managers--Feidhlim Boyle

TECHNOLOGY:
Graduating Managers--Steven Kron, Dan Wells
Incoming Managers--Michael Emery, Claire Liang, Brayden Mathews

CONSUMER:

Continued...

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