Outlook & Exit Opps of Fixed Income vs. Equity Research
Based on what I’ve read in various threads, it seems that in the near future, (sell-side) equity research as a whole is consolidating and will not grow too much. I wanted to know whether the outlook for fixed-income research is better or worse than equity research?
Also, how do the exit opportunities coming from FI research compare to exit opps from equity research? I know that both can go into the the buyside but does one type of research have more opps than the other? Thanks.
Finally a decent thread.
From what I've read, it seems like: Equity: Equity L/S Distressed: Distressed Debt, Distressed trading Macro products (rates): Macro fund
Distressed damsels also qualify
quant FI or fundamental FI?
Jesus, I think you should compare apples-to-apples. If you were doing Investment Grade fundamental research vs Large Cap fundamental equity research, the Large Cap guy would have more opportunities because there are more funds that do that kind of investing, and the equity guy will probably understand fundamentals better. Also not as much money to be made in high grade bonds especially given the lower vol.
Um, yeah, some do...point?
This thread has wasted potential.
Fixed Income versus Equity Research (Originally Posted: 10/12/2012)
I have been searching for an Equity Research position for the past several months and recently realized that I don't have a solid response to the question, "why equity research instead of fixed income research?". My immediate answer to this question is that there is no upper bound on the returns one can make in equities, while bond returns are fixed. A senior credit research analyst who has been helping me thinks that answer might imply that I think I can come into a firm as a first year associate and 'hit home runs' (ie might rub someone the wrong way). I'm in the process of researching why one career path might be more/less desirable than the other, but does anyone have a good idea of the pros & cons of working in Equity Research versus Fixed Income Research, or vise versa?
if you take corporates out of the question for a second, you can speak about wanting to drill down into a company story as oppose to a government, country, rates...Even in the case of corporates, you'll be dealing a lot more with cash flow than with the entire story of the company. A bonds value is "more or less" determined based on if company x will have abc amount of dollars to meet xyz amount of interest payment. IMO, equities require a deeper understanding of the other factors at play and your investment thesis can have a longer time frame as oppose to corporates where the deadline is set from the beginning. Obviously, this is a little simplistic and there are other considerations but I would think something along these lines would suffice for an interview.
I think I see what you mean. There are definitely inherent differences between analyzing the two. In the simplest sense, ER guys care about buying at discounted value whereas fixed income guys focus more on leverage. Additionally, someone who is looking at fixed income investments isn't going to care about the high growth capability of a company if they can't service the debt today (unless maybe we are talking about zero coupon bonds). On the other hand, and ER analyst would consider factors other than current cash flows in gauging the investments desirability; maybe the growth potential that would be the basis for the CF projections are the 'entire story of a company' that you are referring to (correct me if I'm wrong).
Does anyone who has worked in Fixed Income or Equity Research know the most common pros/cons that are commonly cited? Are there any obvious points that I should know to address?
Fixed Income Research v. Equity Research (Originally Posted: 11/23/2009)
What's the difference between the two? How are exits different?
This is a joke right?
They are exactly what they sound like.
Fixed Income Research is research either on FI issuers or on specific issues. Equity Research is on companies that issue equity (publicly listed stocks) and on trends in equities for industries and whatnot.
FI is prolly the most boring piece of a garbage in any full service shop. Avoid like the plague. ER tends to place better into HF and buy-side generally speaking.
Unless you join the FI distressed trading desk. Its the best place to be right now. In a few years you'll have the experience trading junk which will set you up as a perfect HF transfer.
Disagree 100%. I work at a hedge fund with someone who came from fixed income research and i would prefer to work in FI then equities. I am continually perplexed by the seeming consensous on this board that equity hedge funds make up more of the buyside world then fixed income funds. That is just not even close to being true. In general, the market for individual equities is a sideshow compared to FX and rates markets in terms of size, depth, liquidity and the amount of people employed.
..
Bondarb is very biased, but has some good points. There is no consensus about the size of equity hedge funds compared to bonds, options, currencies, or commodities. This is just you reading into the fact that they are discussed more often on an IB focused board. Also, someone who comes from IB, consulting, PE, or equities S&T is much more likely to wind up at a L/S, fundamental, equities type shop.
FI is a very large space, with excellent placement options if you want to leave. ER goes well to Corps, Equity HFs, and PE shops. FI goes into well HFs, credit analysis, DCM type positions at banks, etc. These days with debt markets as they are, there are tons of distressed debt HFs out there looking for people, however a few years ago that market was much smaller, and will hopefully be again.
Fixed Income/Equity research (Originally Posted: 01/08/2007)
I've pretty much decided that investment banking and 90 hours weeks is not for me, though fixed income/equity research sounds appealing.
How tough is it to get a job in these divisions compared to i-banking? What are the salaries and hours like?
Thanks!
do you mean fixed income research? the hours can be rough around earnings time make no mistake. the higher less ppl, but fewer are interested
Yeah, fixed income research.
I don't mind working really rough hours at crunch time, or for that matter working long hours during the week, or even working the occasional weekend.
However some of my friends who did i-banking over the summer pretty much worked every day for 90 hours a week. No way I would want to do that consistently through the whole year.
ok. salary is worse. you have no p&l so makes it tough to get paid.
and it's harder to pick up chicks by telling them you're in "fixed-income research" (HUH WUT??).
Thanks.
Can you give me any more concrete info on salary? i.e. average pay for analysts, associates who have an MBA, VP, MD, etc?
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