Where to Start in FICC?
If one were to start a Fixed income career today where would be the best place to start? What are some of the career progression be like? The day to day where you started from hours, culture, and comp. Any space at a HF if so under what product? Any PE or VC options as well? Anyone who got their start in Fixed Income how has your career panned out?
Rates, HY credit, and munis are all pretty technical and resistant to automation due to either massive block size risk or illiquidity, or both
Very surprised to see rates included here, can you expand upon that point? Understand large block sizes but rates are one of the most liquid products in S&T.
You can take directional risk in rates - not subject to volker. Also, I should have been more clear, but non-vanilla rates are a bit "better" to focus on.
That said, I left S&T for IB since the differential in pay became almost 2x..
rates vol (sometimes called the options desk, swaptions desk..or the rates structuring desk) is a good place to be...you will learn a lot, and have the ability to trade many products.
also the cross asset rates desk...for similar reasons
Echo the rates vol desk. Great place to be, little automation and definitely fantastic place to learn (esp if they also do structured rates/exo rates)
You prob want to first decide whether you want to do something that intersects more with the banking path if you get what I mean or something more like rates or fx. Those two areas are super different because a high yield desk analyst could end up down the line in a role where ex IB lev fin analysts also are while this is extremely unlikely if you go into some type of rates trading (it would be a total career pivot). The rates person can have a career path that those guys would not be able to have as well. It's just different, not necessarily better or worst. It would be very valuable if someone in say HY, merger arb (this one is within equities not FICC), distressed or like leveraged finance sales could give info on their roles.
Edit: An example I know of is an alum I talked to that didn't start out in S&T but at a small credit hedge fund in an analyst/trading role, and then moved to a huge credit fund doing stuff on both the public and private side. He has a mix of colleagues from IB, S&T, research etc. It's just a very different skill set and focus area than having a macro trading role. I think I'd personally prefer like a rates trading role but others would definitely prefer the above example.
First of all, your question is mixing very different areas of finance: FICC means 'Fixed income, Currencies and Commodities', and is mostly used in S&T and, by extension, in hedge funds and prop trading firms. That is not really related to PE or VC, although you might be able to transfer from a credit or distressed debt desk for instance to a PE firm like Blackstone GSO.
Second, you're unlikely to be able to choose fixed income when you break into a trading firm or bank. BB involve generally rotational programs where your desk will be assigned as the result of a matching between business needs, the desk preferences among the pool of candidates, a lot of randomness and, marginally, your own interests. My advice, if you want to get started in FICC, is to network as much as possible with FICC guys, grow your coding skills as FX for instance is becoming more and more automated, and have some classes in macroeconomics, which will definitely be useless per se, but will send a good signal to the traders, etc., as fixed-income is mostly macro by essence.
Strongest players in fixed-income and currencies are JPM and Citi for the BB. There are some big macro funds like Bridgewater, AQR, Balyasny, and smaller HF such as Pharo which may spark your interest.
How’s GS ranked for FICC (rates desk)?
GS rates trading has always been strong
also suggest EM (emerging markets rates trading) because these lower rated countries debt trading has higher volatility that trading US Treasuries...and higher volatility = more opportunity (still lots of $$ can be made trading Treasuries...its just a different game and higher competition)
How is DB ranked for FICC? (FX, Rates, Credit, EM)
I’d look into Securitized products as well. A lot of security from automation there as well. JPM, again is a leader here, in addition to Citi/WFC/BaML. That ofc would be first for me with rates (preferably structured rates) following that. My personal preference would be: ABS or Non-agency RMBS -> structured rates -> CLOs -> Converts -> Distressed or HY -> nothing else really interests me
Don’t forget CMBS. Also opens up Commercial Real Estate opportunities.
Good point, pretty much any non-GSE securitized product
gonna be rotating through a credit desk- which ones more macro? Besides macro credit, money markets, and obv rates. I like macro, analyzing the fed,economic, world data and seeing how it alters the markets and trying to find mis priced assets.
Don’t really know much about abs, mbs, securitized but that can be a rotation
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