How boring is Fixed Income Analyst / PM in Emerging Market?
So i'm in emerging market and want to go for Fixed income path because better work life balance than equity
I'm initially expecting that FI AM also plays with HY Bond, but turns out here all PM allowed to buy is IG bond
The perception is IG bond is boring, but my thinking is but i'm in Emerging Market, so dealing with EM IG..
1) Does it boring as EM Fixed Income analyst? What's the score if say EM Equity analyst score for interesting job is 10
2) Does it boring as EM Fixed Income PM? What's the score if say EM Equity PM score for interesting job is 10
It depends
Ahh i see.
Interesting that FI analyst in EM countries also have exposure to US IG company.. Nice to know about it.
So if i may conclude, EM IG will be more interesting if the person is more interested in macro? But if the person is more bottom up, EM Equity will be more interesting for him, correct?
Regarding FI analysis, aren't FI analysis also typically bottom up and use 3 statement modelling too? Only the ratios FI analyst see is different than Equity analyst?
You are correct if you are assuming EM IG corporates whereas the big chunk of the market is EM IG sovereigns, hence the macro comment. Would also argue even if doing EM IG corporate there is a different flavor bc of interest rates, bond math etc
Ah i see.. so to parahpase, as FI analyst we’ll be dealing with:
1) mostly EM soverign = macro based
2) Some EM IG corporate = bottom up
3) Some other US IG corporate = bottom up -> most boring one
So 3 statement modelling will be relevant on bottom up
for EM sovereign, what kind of analysis do we usually perform?
Hi, I had come across your comments in a few fixed income and EM threads and found them very helpful, as a current US AM Macro Analyst with EM focus, interested in breaking into a dedicated EM fixed income team (preferably sovereign) but also looking at short grad school program in the interim to boost my skillset. Could I PM you to connect?
sort of:
- typically a fixed income analyst would specialize in one of US IG, EM sovereigns, EM corporates in addition to other stuff. Kind of like you have US large cap equity analysts, US small cap, EM equity etc.
- just to clarify i meant the market for EM sovereigns is bigger than EM corporates so they have more bonds outstanding. Similarly US IG is actually way bigger than either of the others. It would be very unusual for one person to focus on all 3
- EM sovereign is balance of payments and debt sustainability analysis basically (mostly macroeconomics)
Ahh i see. Interesting.
Regarding sovereign do balance of payments and debt sustainability analysis, so FI analyst who specialise in Sovereign will be more like economist role?
Between Sovereign FI analyst and Economist, does their skillset is similar and interchangeable?
If so, which one of the 2 is seen as higher prestige and pay?
Yes, a lot of economists in the role. Not totally interchangeable, but pretty close i.e. kind of like equity and corporate credit analysts. In the economist role typically about forecasting key variables in extreme detail (growth, inflation) while in the sovereign analyst role you are doing high level econ forecasting and using those inputs to make investment recommendations.
I would say adjusted for equal level/seniority pay is probably better for sovereign fixed income analysts because it is a investment role where you are recommending positions vs. economists who don't typically do that.
Prestige is tough to say, but I think economists probably have more as chief economists are very high profile on TV etc, but among those "in the know" I think you'd be more impressed by a sovereign fixed income portfolio manager
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