Domestic vs. Emerging Markets?

Current MBA student and new to this forum. I am currently deciding between a few buy side research internship offers. Any advice or insight would be great. Hope is to break into buy side equity research full time, and hopefully in the long term settle in the northeast. 

  1. Emerging markets equity analyst at a boutique asset manager (~2 billion AUM) in a very HCOL city on the west coast. This seems appealing because EM seems like an interesting and niche space, and an internship could be a great way to see whether it's right for me. Also in a much more "exciting" part of the country that I've always wanted to experience, more MBA/undergrad alumni in the area, more buy-side opportunities in the area if I wanted to leave. Conversion from intern to full time is very high. Potential cons are insane rent prices (and not sure what comp at a smaller asset manager typically is), and I've heard EM is more stressful than domestic (any EM people to confirm?). Also not sure if EM would pigeon-hole me into EM for the rest of my career.
  1. Domestic equity analyst at a boutique asset manager (~11 billion AUM) in a LCOL city in the south. Really like the people at this firm and I think I'd grow a lot here. Conversion to full time is high. I am not particularly fond of living in the south, but would get more bang for buck salary-wise.
  1. Domestic equity analyst working in investment arm of a large insurer (~981 billion AUM) in a very LCOL city in midwest. Conversion to full time rate is 50%. This is in a small slower paced city with not much around, but more bang for buck salary-wise. Also not sure if being part of an insurer changes anything career-wise. 

Comments (11)

Feb 3, 2022 - 12:39am
dickthesellsider, what's your opinion? Comment below:

3rd doesn't sound too interesting. Insurance doesn't have pure alpha generation mandate, not good for your investing career.

So it comes down to 2 dimensions: 1) EM vs. Domestic 2) SF vs. LCOL city in the south. I think location is lesser of a focus as your long term goal is to be in neither of these regions. It comes down to which firm has better culture / PM / process and whether you wanna do EM or domestic. Can't make that decision for you, but location is less important than which firm / geographic focus you want to go with for the first job on the buy-side. 

Feb 3, 2022 - 12:52am
WiltTheStilt, what's your opinion? Comment below:

This is super helpful, thanks! Do you think it'd be easier to start in EM and switch to domestic, or vice versa? I find the EM space very interesting, but I'm guessing I won't know for sure if I like it as a career until I'm doing it everyday. 

Most Helpful
  • Research Analyst in AM - FI
Feb 3, 2022 - 7:50pm

Agree with above that can probably toss #3 out. Also, there are seats in tons of different places, including LCOL EM ones. Not saying they are easy to get, but they exist so I'd probably choose based on the asset class focus. I'm on the EM FI side so less insightful than equity folks but can hopefully provide some value for things that are similar.

Negatives:

- EM always seems to get more scrutiny from the top, some justified, but some because it's easier to pick on (less of an issue at a dedicated stand alone but more so at big firm)

- EM is more stressful in sense of dealing with different time zones, languages, currency (arguably more exposure to macro factors), disclosure, regulatory and worse information. So many examples of waking up, scanning my phone and effff there goes the day fighting that fire   

- Would defer to the equity experts but have to think EM equity vs. US equity stark underperformance has created some flows issues even if get comped on index relative performance 

Positives:

- Great career moat once established because tough to credibly "pick it up" and many shy away for aforementioned reasons (I find a lot of folks equate an asset classes' investment risk with its career risk, which is not always accurate IMO)

- Never boring: if you like macro, different countries, politics and that kind of stuff it is great (cuts both ways as will drive you nuts if not passionate)

- On the FI side easier to outperform, and I heard the same said from a prominent EM equity manager given level of dispersion, but i'd defer to an expert

- On the FI side definitely more resilient vs. passive and again not an expert on the equity side, but would have to imagine it has some merit there too

- Easier (but not easy) to rise to the top: somewhat subjective but i've seen all asset class EM types get looks from the big folks even if more unconventional backgrounds just given a smaller competition pool (not one of 1000 looking at MSFT)

Feb 3, 2022 - 8:44pm
WiltTheStilt, what's your opinion? Comment below:

This is some great insight. Thanks so much! I've heard typical work-life balance is 10-12 hours/day, with the occasional weekend during busier seasons. Have you found that to be true? 

  • Research Analyst in AM - FI
Feb 3, 2022 - 8:55pm

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