Mutual Funds ... where do they fit in?

stillsleepy's picture
Rank: Monkey | banana points 63

I've been searching around .. perhaps not thoroughly enough, but I haven't really found an answer to something I've been trying to figure out. Basically, I'm curious how Mutual Funds fit into the whole finance/banking industry web...

Which catagory or segment do MFs make up mainly? What are similaries and differences to other banks? Hedge funds? VC's? I mean I understand the differences as business model, but from an employment point of view would an investment analyst at a MF be doing a very similar style job to an analyst at an iBank? Are mutual funds a place many people aspire to work (or lateral into?)

The reason I ask is that my recent interest in finance has been centred on ibanking almost entirely... but it turns out i might have some networks closer to MFs, but I'm not even totally sure what kind of questions I should be asking if I met them!

anyways, thoughts, opinion's, and perhaps experiences are appreciated. I'm posting from my phone (at another summer job hehe) so sorry if this is in the wrong section, and for the horribly spelling etc.

Comments (5)

Jul 18, 2011

Mutual Funds, from my understanding, collects funds from investors to invest in diversified portfolio to minimize risk but at the same time to get some yield. Since you have looked into different aspects of finance, you probably already know the difference between mutual funds and hedge funds.

Nonetheless, mutual fund is part of finance and is not bad at all.
Investment Banking is much more work intensive as it requires you to gather information, pitch and go through the project. The biggest aspects of mutual fund is portfolio management and sales.

So if you are into putting together a low risk, decent yield portfolio or sales, mutual fund is definitely a good place for you.

Not to mention, since it is market driven (stocks, bonds, other securities) your hours are much better than those of investment bankers.

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Jul 18, 2011

mutual funds at least on the research/port management side fall into asset management spheres...

Jul 18, 2011

A mutual fund is a structure, not an investment style.

Most of the mutual fund strategies would be considered vanilla by hedgefund standards but there are more aggressive mutual funds that go short, use leverage, earn fulcrum fees (similar to carry), etc. The biggest distinction between hedge vs mutual is the target investor profile, and I dont just mean retail. Institutions often need the liquidity of a mutual fund or active etf but are still interested in a particular strategy.

Jul 18, 2011

Thanks for the replies guys. I understand and know that Mutual Funds are a "structure" or perhaps better put, a type of business. I know the differences between an MF and a HF too. What I'm a little confused on though (and Kosky and Shorttheworld kind of touched on this) is exactly what the employment structure/positions/path would be at a MF.

For example, because I've been so interested in IB lately most of my reading has centered on stuff like financial modeling.. This forum and sites (blogs?) like dealbook have given me a good idea of what kind of stuff an interviewer would like to see in a potential candidate. However, as you might expect I doubt this sort of stuff would stand out to the interviewer for a position with a MF. I suppose my ultimate goal of this thread is to figure out what methods, skills, and techniques would be more relevant to the types of jobs one would do at a MF.

Perhaps I'll look more into asset management (thanks again shorttheworld) to see if I can get a nudge in the right direction.

Any other thoughts, opinions, etc are greatly appreciated :-)

Jul 19, 2011

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