Econ vs Finance - Fixed Income Trading/AM/IB
Hi, I’m a freshman and I’m still not sure if I should pick Econ major with Finance minor or Finance major with Econ minor. My interest primarily lies in Fixed Income Trading (High-yield, distressed, illiquid credit) followed by IB and AM. What are your thoughts on this dilemma of choices, which one to pick and why?
Would I need a specialized masters after undergrad like Applied Econ, Financial Econ or MFin for FI high-yield trading? If yes, which one and at which graduate school?
Pick what program you think you'll enjoy more but my unqualified thought is that the finance program is probably better for that type of trading/investing because of the more accounting/corp. finance classes. I don't see why you would need those types of masters unless you can't land an analyst position in s&t post undergrad. Obviously the better your undergrad, the easier it is to land that. Only heard of an MFin being specifically useful and they are usually quant oriented (doesn't necessarily sound like what you're going for). Ranking of schools: https://www.risk.net/risk-management/6148511/quant-finance-masters-guid…
Thanks for your reply. Don’t you think Econ would be much more applicable to Fixed Income’s S&T division, especially Rates trading, which is more macroeconomic in focus? In my case - I have an offer for Econ major with Finance minor at a public ivy, semi target but the Finance major offer is from a really, really non target, regional college. There are no high finance alumni from that college while the public ivy is heavily represented.
Econ would be better than finance for S&T. Constantly need to be analyzing policy changes, especially in a more macro role like rates or FX. The most coveted majors for S&T are STEM, though. Math, engineering, and ComSci are desired. I recommend a minor in math/statistics at the very least. Too many econ majors applying for trading jobs with no mathematical background.
Hi, thanks for your answer. Do you think I still need additional math courses (Econ at my college has Calc 1, 2, ODE, matrices)? I could take some stats classes too (Probability theory, mathematical stats, R).
Is a math minor or more advanced courses required if I want to do high-yield trading/syndicated loans/MBS/credit derivatives like CDO, CDS, etc? With my freshman experience, I understand that it’s heavy Econ analysis with bond math. No?
Wow, that's a lot of math for an econ major. The issue is not what you learn, though, but what you can signal to employers. I'm a math major, and very little of what I learned (almost none, other than a stats and financial math course) helped me with last summer's S&T internship, but it helped show employers that I'm capable of handling numbers and thinking. They won't ask you about your courses--they'll assume they know what is in an econ major. Having the title of major or minor is big, though. It's all signaling. Once you get to the job, none of it matters.
Gotcha. Do you know which banks or funds are heavy on fixed income trading - high yield/credit/rates/MBS?
JPM is top tier here for credit. For MBS, Credit Suisse. Citi is great for macro (currencies, rates, and commodities).
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