Recruiting At Top Mutual Funds (Cap Group, etc)

Hey guys,

After joining DFA (500+ billion AUM), I'm curious about possible exit opportunities for someone interested in remaining in mutual funds with the eventual goal of becoming a PM. My current role was received through OCR and is a mixture of research using Python/SQL and more mundane day to day tasks like portfolio reconciliation and data requests, etc. I'm happy with it as an entry level job, but will likely move to another firm before business school to make my resume look better for IM recruiting (assuming this move is even necessary).

I've seen a couple great entry level programs with high turnover that hire quite a few people with "at least 2 years of experience in equities" at places like Capital Group who hire people with a pretty wide range of backgrounds. Given my experience in mutual funds, top 5 undergrad degree, etc., do you think I could get an interview at somewhere like Capital Group for entry level ER? I'm confident I'm technically prepared for these roles, but without a huge name on my resume/connections I'm unsure if I should try to get a year of experience in sell side ER before moving to a bigger mutual fund or if my years at Dimensional will make a direct change possible. Thanks a lot and any additional advice for what sort of roles I should consider is greatly appreciated

Comments (11)

Apr 7, 2018

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Apr 11, 2018


Apr 12, 2018

Tbh, DFA is not a great way to get into fundamental equities (still a good company tho), because most of their strategies are smart beta/quantitative. You'd want to move early on so you can still qualify as a junior hire. If you're interested more in portfolio analysis, you're good to go. You should try to get an entry level job on SS.

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Apr 15, 2018

@SomePleb Would that still apply even though DFA's smart beta strategy basically just consists of tilting their portfolios more toward factors that basically proxy for value? I'd imagine much of the research techniques used to determine which stocks are undervalued at Dimensional (HML factor) could be applied within the world of fundamental equities too. Obviously DFA conducts much broader research and isn't as stock-specific, but would it be possible to get an entry level research position (pre-MBA) at a more conventional value fund like Cap Group even if my experience is slightly more passive? After all I've read about how hard it is to go from sell side to buy side ER I'm hesitant to give up on a direct switch to another buy side firm. and thanks again for the advice

Apr 12, 2018

My CIO kinda mocks DFA. But then again, we're fixed income, so we actually beat our benchmarks. What sector do you cover?

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Apr 12, 2018

I interviewed with DFA for the PM group during undergrad and I absolutely loved the company, but I did get the impression that trying to lateral from DFA could be awkward. A lot of their investment philosophies (cult-like belief in EMH) are sort of antithetical to a lot of other value investors' or hedge fund investment strategies.

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Apr 15, 2018

@LReed yea I've gotten that sense as well although just from looking through LinkedIn it seems like lateralling out is something that can occur at early stages. I agree though that people tend not to leave

@SomePleb yea DFA is way bigger on the equity side for sure

Apr 12, 2018

Yeah I mean it's also a pretty cush job so I don't see why you'd want to switch. I feel like if you go the PM route it isn't really beneficial to switch companies once you build up a solid pool of AUM at a certain firm.

DFA has pretty strong ties to UChicago too, which could possibly be cashed in on when it's time for you to get an MBA.

Congrats on the offer though! I interviewed at their place in Charlotte a little while ago and loved it.

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Apr 12, 2018

Btw, there's more than one good way to be a portfolio manager. Fundamental managers are getting phased out. You should think about that when you make a decision. There's a reason why I respect DFA. And it's not because they paid me to.

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Jan 4, 2019

Advice on this thread is terrible. Anyone equivocating between a passive shop and an active shop isn't thinking about this OP's career at all.

From a career perspective, DFA is an index fund. From a client perspective, it's a bit less of an index fund because they choose to tilt toward certain factors. But we're talking about your career; you're doing nothing to evaluate stocks in even the slightest of ways. A computer is assigning weights based on BTM etc and telling you what to buy and sell.

There's really no human element at all to what DFA does. Only reason humans work there is to do back-office tasks like OP alluded to - things like figuring out why a portfolio is off-target relative to what an automated system said to buy. For this, they earn fancy titles like PM but make no mistake, the responsibilities reveal what the job truly is. And from what I've heard, the comp does too.

Advice to OP: if you're interested in investing, you're at the wrong place. Period. Working at an investment firm doesn't make you an investor, and neither does a fake PM title. These are all glorified back office roles and what you should do is trade on the good name of DFA to get yourself a real investment job. Either sell side ER or buy side, whatever you can get. And sooner rather than later, because eventually the job market will figure out that passive shops don't teach people anything.

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Jan 4, 2019
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