AuthorTopic: What does a fixed income analyst do?
@2015-07-26 11:17:26
I'm trying a career change after 15 years as an IT analyst (consumer products supply chain, mostly). I'm in NYC and just passed CFA-1 with analystnotes notes (great value!).

I'm looking at starting as a Fixed Income Analyst, and my question is "what do they actually do from day to day?"

Is it all credit and default risk analysis? What is the career path, and in particular what skills become important as you move up the chain? Where do you end up?

I think my main skills are analyzing multiple inputs and coming up with a good recommendation, as well as good client service and medium-quality sales.

It would seem that high yield or "distressed" situations offer the best opportunity for analysis - I suspect there is more return from correct analysis there than in the government or AAA corporate analysis.
@2015-07-26 16:37:08
Fixed income is quite a large field and the title "Fixed Income Analyst" can mean many different things (kind of like "Trader"). I'd say the biggest difference is if the place you're looking at does straight fixed income or fixed income derivatives. I mostly worked with fixed income derivatives so I can speak to that better than plain fixed income. You'd probably need to know things like..

--how to value a swap
--what is a swaption, cap, floor, ED Future, EDFuture option
--If you buy a bond, sell the fixed side of a swap and swap spreads increase what happens
--What are zero/forward rates
--How is a yield curve built
--Basic understanding of duration / convexity.

At least these are the questions I always asked. First job responsabilities include trade verification, PnL verification, risk projections. Experience with excel/databases together with a good understanding of all the greeks (delta, gamma, vega, theta) are important for promotion. All bonds we used were government.

Didn't answer most of your questions but I hope this gives some insight.
@2015-07-26 19:01:30
Could somebody give me some advice on factors that I need to consider when choosing between debt or equity. I have a final interview coming up very shortly for a position as Research Analyst, where the specialisation in bond or equity is still very much open.

How do the jobs compare in terms of salary, working hours, responsibilities, job security and everything else that you can think of....

Any advice is greatly appreciated!
(I have done some research on this already but I would like to hear everybodys opinion since you are the real experts)
@2018-10-21 19:18:37
The big difference between Equity and Debt is the way you look at the investment. On the debt side, you do credit research and try to determine if the Credit will improve or become worse. You tend to focus on the downside of the investment. With equity, it is the story that matters. Most investors try to boil down the investment into a strategy that seems to make sense to them. The equity investor focuses on the upside of the investment. This is just a generalization, obviously, what is good for the equity investor could be good for the debt investor and vice versa.

In both cases in pays to do thorough analysis, but if you are a debt investor and you have the ear of management of some company, you will want to ask them very tough questions which some people may not be comfortable doing. If you want a combination of both, then do high yield or private equity.

CFA Discussion Topic: What does a fixed income analyst do?

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Andrea Schildbach