Finance Friday: What I Do for a Living

Hey hey! Several years ago I tried to start a "Finance Friday" post series with the intent to do them quarterly. Well, that sort of fell by the wayside but after talking about these posts with a new blog friend, it kind of reinvigorated my motivation to start them up again! Plus, I had an exchange with another blogger about careers/how I ended up in finance. So I figured this would be a good topic to start with. 

I've referenced that I work in finance/financial services but haven't expounded much on it besides that. I think because I fear it is not very interesting to others? I kind of hate it when people ask what you do for a living at social events and such because my job is kind of hard to explain and my expertise is in an area of the market that is not well understood (the bond market). So I usually just say "I work in financial services" or "I work for an asset management company." 

But I am curious about what others do and I always appreciate a deep-dive post about what others do for a living, like this post from Stephany where she delves into what she does and how she got into her role as a content writer. So here is my attempt to explain how I fill the hours of my work day without boring you to tears. ;) 

Overview of my industry (asset management) and sector (fixed income):

I'll start off by explaining the industry/sector I work in to lay some basic ground work. I work for a large global asset management company that manages assets across basically any area of the global financial market - stocks, bonds, real estate, alternatives (too complicated to get into), etc. When I say "manages assets" I mean that my company manages mutual funds, ETFs, separate accounts, etc. My firm also specializes in responsible investing which focuses on environmental, social and governance factors (i.e. how are these companies treating their employees, addressing climate change, assuring diversity on their boards, etc).

The two areas of the market that most people are familiar with are stocks and bonds, but most people have a better understanding or are more familiar with the stock market since that is what gets discussed in the press most often (i.e. the S&P 500 went up X% today). That is the sector that my husband works in - he's a trader and research analyst at another small asset management firm. But I work in bonds, which is a sector that is technically referred to as "fixed income." To try to simplify things, a company can generally borrow money in 2 different ways - they can issue stock or they can borrow, either from a bank or from a pool of investors. When they borrow much from a pool of investors, they issue bonds. But there are lots of different companies and institutions that borrow money by issuing bonds such as corporations, governments and municipalities. Companies can also use bonds to pool a bunch of loans they've made. Think of a mortgage company that has generated thousands of mortgages to individual home buyers like me and you. They can take a bunch of mortgages, pool them together, and sell them to investors - the investors then receive the principal and interest payments the individual mortgage borrowers make on a monthly basis. Something similar can be done with credit card debt, auto loans, student loans, commercial mortgages on shopping malls or apartment buildings, etc. 

Overview of my role:

My job title is "client portfolio manager" but I rarely mention that title outside of my company because people see "portfolio manager" and think that I am actually managing assets for clients, but that is not the case. Instead I would describe myself as a product expert. I mostly interact with a sales team that works with financial advisors and tries to get them to use our products in their clients accounts. Our sales team covers every ETF and fund that we manage, which is probably 100+ products! They can not be an expert and know the ins and outs of every product so they rely on a team of sector specialists, like myself, to answer questions. So I get on zoom calls to go over a product and answer questions with the sales person and the financial advisor or I will have a call with the sales person to prep them before a call, or I will answer questions over email that are raised. I also answer general questions about the fixed income markets.

Examples of questions I answer:

- How has this product performed during other periods of rising rates? What products are you recommending for this interest rate environment?

- What is your portfolio management team's thoughts on inflation and whether it's transitory? What is your forecast for the 10-year Treasury rate a year from now? What do you think the Federal Reserve will do in 2022 to manage inflation?

- What factors drove your fund's outperformance or underperformance? How are you positioned versus this list of competitors?

- Here is a list of bonds this client owns. If you were to manage the account, what would you keep and what would you sell?

- How does the relative value of this sector compare to other sectors? How does it compare to historical averages?

So there you have it - what I do in a nutshell (am I the only one picturing the "in a nutshell" scene from Austin Powers? Hee hee!). Let me know if you have any questions! In a future post, I'll share how I ended up in this field. I'd love to hear what you do for a living in the comments!