Fixed income research vs Equity research

So i read several forum and it seems the conclusion is these below, need confirmation/contrasting opinion from redditor who's has been in this position

1) Work life balance is much better in fixed income

2) FI research is more macro analysis, while Equity research is more bottom up

3) It's harder to move from equity research to fixed income research, than from fixed income research to equity research

4) Fixed income is 80% quant and modelling, 20% understanding financial statement, while equity research is 60% understanding financial statement, 40% quant and modelling

5) equity research is dying after soft dollar restriction and difficulty to beat low cost passive equity, while FI has not met with this 2 issue

6) fixed income research has better job stability because the employer is mostly insurance company, to do LDI, and banks for (?)

7) Fixed income research is overall better path careerwise, but often overlooked because it's seen as less exciting

Comments (7)

  • Associate 3 in PE - LBOs
Nov 27, 2021 - 2:30pm

Mostly nonsense sprinkled in with some truths and half truths

Nov 27, 2021 - 4:14pm

Incorrect, FI can very much be bottom-up analysis also, not all FI is Rates trading. Some of the stuff you have here is very much incorrect. FI can be anything from IG Credit to Linkers to Structured Credit, each of these three require very different skillsets and provide differing WLB's. Please do more research. 

Most Helpful
Nov 29, 2021 - 6:07am

Baygoners

So i read several forum and it seems the conclusion is these below, need confirmation/contrasting opinion from redditor who's has been in this position

1) Work life balance is much better in fixed income

2) FI research is more macro analysis, while Equity research is more bottom up

3) It's harder to move from equity research to fixed income research, than from fixed income research to equity research

4) Fixed income is 80% quant and modelling, 20% understanding financial statement, while equity research is 60% understanding financial statement, 40% quant and modelling

5) equity research is dying after soft dollar restriction and difficulty to beat low cost passive equity, while FI has not met with this 2 issue

6) fixed income research has better job stability because the employer is mostly insurance company, to do LDI, and banks for (?)

7) Fixed income research is overall better path careerwise, but often overlooked because it's seen as less exciting

1) Not necessarily. For example, way more debt issuances than IPOs which in certain seats introduces more time crunches on the FI side

2) Totally depends on the seat. This can be true for PMs but for your garden variety credit analyst it's no different than equities

3) Don't think there's any truth to this. Would actually wager the exact opposite given equity research tends to be more competitive

4) This is worded very oddly. FI modeling will focus on downside protection vs upside potential, with an emphasis on FCF and sensitivity analyses. There can also be a hefty legal component to FI

5) FI probably more protected from shift to passive. This has been discussed ad nauseam on this forum

6) I have no idea what this means. Maybe applies to a very specific role in FI

7) Credit on average pays less - that's why it's overlooked

Dec 30, 2021 - 7:49pm

Thank you very much for your response! i missed your reply due notification issue :(

So regarding point number 4, does 3 statement modelling course will also relevant for FI analyst?

What other course/credentials is relevant in addition to CFA for aspiring FI analyst/PM?

Dec 31, 2021 - 7:44am

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