Guys,
I understand what VAR is etc. etc. but, to me, it seems much more relevant of a statistic to the sell side than buyside.
Can someone please explain to me the value the VAR statistic can bring to a bond portfolio manager?
| +29 | What is Asset Management? | 3 | 2w | |
| +26 | Scam - Remote Equity Analyst Role at Top LO | 7 | 3d | |
| +20 | Workplace bullying or totally normal | 17 | 6d | |
| +18 | Portfolio Associate Interview - Need advice! | 1 | 1w | |
| +18 | Breaking into LO AM from FP&A... | 4 | 4d | |
| +17 | BlackRock 2025 SA | 30 | 12h | |
| Am I cooked? | 6 | 2w | ||
| +15 | How to not be mentally drained by this job? | 4 | 1w | |
| +13 | Do LO invest in businesses or stocks? | 3 | 3d | |
| +12 | Portfolio management vs asset management | 4 | 2w |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
I'm not really sure you know what VAR is, to be completely honest.
VAR measures the statistical maximum loss that you may experience in any given day with a 95% (usually) confidence.
Why would it be at all relevant to the sell-side? Sell-side doesn't have a portfolio to manage... what could they lose?
Conversely, the buyside does have a portfolio with a certain amount of risk. Knowing you VAR for that portfolio
lol ...
What an idiotic post by Sovjet.
VaR is obviously relevant on the sellside, because sellside trading desks will frequently have their book restricted to $x VaR rather than on an exposure/asset basis.
Similarly on the buyside, you will typically have both an exposure/VaR limit on your allocation if you are in a multi-strategy FICC orientated hedge fund - equity/credit focused funds tend to have less of this, as the majority of cash instruments are risk-managed in a less formal manner.
It's worth noting that certain retail-marketed fund structures (such as UCITS in Europe) will have VaR restrictions as part of their ruleset, and some understanding of that, albeit not crucial, has some value as a portfolio manager.
Sequi asperiores qui ut laudantium dolorem doloribus accusantium. Accusantium magnam debitis et voluptas dolorum. Nulla consequatur nemo voluptatem voluptatem harum quis et. Error praesentium distinctio qui doloribus et temporibus aut hic. Nam voluptatem excepturi consequatur eius.
Sequi qui temporibus cumque iste consequatur id quis. Unde natus ea sint. Quis laboriosam saepe sunt aut ipsam.
Dolorem est velit natus perferendis nihil eos eaque. Explicabo quo iure in.
Repellendus sed aspernatur ipsum consequuntur id ut. Rerum soluta qui ipsam provident dolorem modi voluptate.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...