Anyone know how much these guys get paid? I know there's a HUGE variance, so don't state the obvious.
Let's say you work for Fidelity or Putnam and manage 5 funds each with 10 billion in assets. You earn decent returns that earn a couple percent more than the S&P for the last few years. What would you take home?
if you manage $50bb at fidelity you will make several mil a year. this type of work pays fairly low the first 5-10 years but you can do great down the line. I doubt there is a harder job to get out of school than fidelity though.
in seriousness your question is a bit like saying: "you are the head of a prop desk at a bank your group makes $150mm a year for the last few years. will you get a big bonus?"
what about mutual fund managers that don't beat the S&P. i think this is about 70% of them. what if they manage $30-50bb, can they still expect a few million regardless of their mediocre performance due to mutual fund fee structures?
how is fidelity so selective? i think they hire quite a few MBA grads to become analysts with a career path of a few years up to a portfolio manager if they're good.
they hire a few. maybe 10 or so I think.
and yes, it's an aum game, even if you underperform. if you are managing that much you are near the top of the heap. just like the head of an ibanking group is going to make a lot even if the group has a bad year
im almost positive that mutual fund managers only recieve a percentage of the size of their fund, performance is not a factor in compensation.
Hedge fund managers recieve a much smaller management fee and really only make money if they do well
hf managers make 2% of aum. show me a mutual fund with that kind of expense ratio
If a mutual fund has $1bb under management and an expense ratio of 0.60%, does that mean that Fidelity would take $60 million/year, or how do these fees generally work out?
What could a mutual fund manager who manages 3-4 funds that total 4-5bb expect? A million or two/year?
60 bps on $1bb is 6mm. that's what fido would make. you're talking about someone pretty near the top of their game. they could def make over $1mm a year
bad calculation on the 60mm, hah.
do mutual fund managers tend to be trader types or more warren Buffett/value investor types. or are they mostly a mix of both?
relatively few mutual fund managers are true value investors like Buffett. there is a mix, some more fundamentally oriented, others not. i am more of a value guy myself so those are the managers i know best (guys like berkowitz, whitman, weitz)
thanks for all of the information.
any suggestions on good readings or websites about mutual fund managers and the industry?
i have heard that most of fidelity's operations are guarded under utmost secrecy.
is it true that many of the fund managers at fidelity work 8 - 5?
i know one person at fido and his hours are good, but not that good.
General response to the question about value investing (and all active management for that matter)...
You've got to be keenly aware that there is a distinct separation between the business, and the profession, of money management. The business of money management focuses almost entirely on generating fees for the manager (mainly by increasing AUM), whereas the profession focuses on fulfilling fiduciary responsibility and making money for investors.
And unfortunately, the two are almost completely at odds with each other.
It's easy to be starry-eyed about how you'll take the long-term approach and be a Buffett-style value investor as a PM...but it is exceedingly difficult to stay that way when poor short-term performance opens the door to vast fund outflows during a bad market. The firm loses fee income, and the PM can lose his/her job...despite the fact that the investment decisions may be the best for investors in the long run.
Likewise, the push to increase AUM makes moving the needle that much harder, thereby reducing the potential for investor returns. But rare is the manager (although it does occur) who willfully closes the fund to new investors, and thereby forfeits the additional fee income.
Being a PM for a mutual fund can be a sweet gig, but don't fall under the impression that as a PM you'll be able to invest with the intention of beating the market while also making money for your employer. Rarely do those two objectives co-exist peacefully.
I've read about this before. Great insight and eloquently put. Kudos
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