I'm wondering whether it's easier to break into equity or fixed income analysis/research at the entry-level? Both equity and fixed income sound interesting to me, so I don't mind where I start. If one is easier than the other to break into, it'd be helpful to know, since many people have stronger backgrounds than myself. If anything, I would guess that equity is harder to break into, since it's sexier in most peoples' minds to be analyzing stocks/companies. But that's just my guess. What do you guys think?
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I don't think it really matters.
Both of them are difficult mainly because, unlike IBD, there aren't that many vacancies in research. Fixed income is a bit more technical, so if you tailor yourself to such position you may have better odds at it. Certain fixed income groups (distressed, emerging, etc.) are quite "sexy" too.
Are certain backgrounds more beneficial to FI research/analysis then? For example, is a background in econ and math more beneficial in FI than equity? Is a masters in econ looked on more favorably in FI than in equity? Is an MSF a better degree for FI than equity? Is an MBA still a good degree for FI?
Thanks, I didn't know that.
Agree with UKtop. They are both tough. You might not necessarily care whether it's FI or Equity but you have to be able to explain why whatever position you are interviewing for is all you've ever wanted to do. You will likely get asked, "why fixed income over equity?" if you pursue that track.
What exactly do you mean when you say FI research is more technical? Could you give some examples?
The best way its been put to me is that equity research is more of an art and fixed-income just by the nature of the asset class is more technical. Hence, fixed-income research tends to be more quantitative and model based while equities can be just as technical or can be more qualitative based on how the analyst approaches his analysis. Unless you are in credit research, in general FI research tends to be more macro based. Equities tends to be more micro. So a better question to ask is whether you are more interested in macro/micro...
What exactly is the difference between credit and FI research?
To add a bit more to FI, it is more technical. However, you can pick the more qualitative route in credit. I chose credit research over quant, and you can even get a taste of both if you can work with a structured products team. I thought fixed income was much more micro, but it has not been that way. It almost tends to be more macro since you have to keep up with the Fed and all of those economic factors. So I wouldn't say its quite that clean cut when it comes to labeling macro/micro, but I guess the sell side could more black and white in those terms.
FI research = gov. bond, swaps, etc., and derivatives on these products. Credit research is all corporate debt products, so you gotta account for credit risk as an additional factor. How to calc credit risk uses corporate valuation techniques hence similar to equity research...
thanks
try to get your hands on diffirent research reports and you'll quickly realize there is really next to nothing in common between, say, equity and fixed income strategy report. that should give you a good idea on what you'd enjoy doing (ER will be boring to even read for FI guy, and vice versa) but generally, if you like corporate finance and slaving over dcf valuations look into equity or credit. FI, as previously said, is more technical so the focus will be on relative attractiveness of different products. go into that if you are interested in macro and pricing of financial instruments (callable, putable, swaps, swaptions, convertibles, strips, tips, etc)
Can you recommend some places where I can find these reports? I've seen some equity reports, so I'm mainly interested in finding some good/credible FI reports.
Better yet do research in convertible bonds and you have the best of both worlds :P
Maybe even become the next Ken Griffith...
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