Tired of your financial analyst salary and thinking of advancing your financial career a notch? Why not step up as a portfolio manager? The main responsibility of a portfolio manager is to make the final investment decision regarding asset or fund management vehicles. Although this position is typically awarded to financial professionals as they gain more experience in their field, there are some things you can consider that will considerably aid you as you obtain the required experience.
For undergraduates who are planning on becoming a portfolio manager one day, business, accounting, math, and economics courses are advised. Additionally, note that a Master’s Degree in Business Administration or MBA is also preferred by majority of employers. Like most financial professionals, portfolio managers are likewise required to have one or several professional licenses from FINRA or the Financial Industry Regulatory Authority.
Portfolio managers should also have a professional designation such as the prominent CFA or Chartered Financial Analyst designation. All CFA designation applications should have the necessary job experience and should display aptitude in accounting and financial techniques and terminology, quantitative analysis, and economics to name a few.
Initially, you should also consider a career as a financial analyst since most portfolio managers started out working as financial analysts. Being employed as analyst is an excellent opportunity to hone the required skills you will need as a portfolio manager. It offers individuals the chance to make critical decisions regarding portfolio management like selling and purchasing securities, and evaluating and determine establishing crucial economic conditions that directly affect specific investments.
When thinking of becoming a portfolio manager, you should also be aware of the different positions available to you. In general, job positions will be based on these criteria:
- Investment Vehicle Types: Investment vehicle types generally include hedge funds, mutual or retail funds, pension and trust funds, institutional funds, and investment pools with high net worth. A portfolio manager can either manage fixed income or equity investment vehicles and more often than not, specializes in a particular type.
- Fund Size: Portfolio managers may either be assigned to manage assets for big institutions or smaller independent fund institutions. They are likewise capable of managing the capital of huge businesses like banking institutions and organizations with big endowments like universities or colleges. Those who manage assets for huge institutions who manage money affairs are typically called portfolio managers and those responsible of managing smaller asset funds are normally referred to as fund managers. On the other hand, those who manage asset funds for huge business companies or universities and colleges are called CIOs or chief investment officers.
- Investment Style: Typical investment styles are making use of hedge practices, international fund investing, domestic fund investing, big or small cap specializations, and value or growth asset management styles.
Naomi Stephens is a portfolio manager who specializes in hedge funds.