Trader in Asset Management

Hello all,

I have been wondering what the difference is between a trader in Asset Management and securities division.

For example GSAM or JPM AM, both have trading positions in Fixed Income Trading.

What´s the difference between a "normal trader" and a trader in Asset Management?

Thank you very much

 
Most Helpful

I'm a fixed income trader in a bank's asset management division. You invest money on behalf of the firm's high net worth clients in their asset management division, or help invest the division's mutual funds. Depending on your desk within asset management, this may be on an execution (the firm's financial advisers tell you exactly what to buy) or discretionary (the client tells you their risk parameters and you choose the bonds you think are appropriate.) Put simply, you are a buy side trader, you invest money.

A "normal" trader, at least to most of WSO, is a sell side trader who invests on behalf of the bank itself's balance sheet and bottom line.

Sell side traders are measured by PNL, buy side traders are measured against their benchmark.

At least at my bank, my pay is tied to our firm's products and their performance relative to their respective benchmarks, as well as how we are doing generally in terms of AUM growth that we can bill on. In fixed income, trading on the buy side for an asset manager is generally lower upside in terms of pay, but your job security is a LOT better. I like my work very much and feel good about what I do for our firm's clients.

 

Yes they do. I worked at one, so feel free to PM any questions.

It is as Tradin said, execution based and finding liquidity. Most of the guys and gals came from sell-side trading. You have to keep up with the markets as any equity trader would. Trades are PM driven; they have a price target and the trader adds value by buying it below that target/selling it above that target. It takes a while for illiquid names to get executed; sometimes even a couple days if there is no natural seller/buyer. The traders also interact with the sales-traders from the major broker-dealers. They do this to keep up with the markets, get whisper numbers on economic data releases, and source liquidity.

 

When I interned at an AM firm, the PMs made decisions on what to buy. Its the trader's job to determine when is the best time in the short term and find an entry point for that position. Look at how much liquidity there is for the type of position we want to get into. Execute, chop up orders as you mentioned. Maintain relationships with brokerages

 

I've spoken with two traders (one bond/one equities) who work within the AM division of a BB. Two things stuck out to me in speaking with them: 1. The bond trader had much more of a two-way relationship with the PMs, and said that he IMs and calls the PMs a lot to talk about new issues that the PM may like for his client. It's a lot harder for PMs to keep track of new issues whereas they have a pretty good idea of the stocks they like, so it's important for the fixed-income traders to get an idea of what types of bonds the PM likes for his clients, aside from executing orders that come in from PMs. The second was in speaking to the equity trader it seemed like his role was pretty standard, and he doesn't have a lot of influence on the decisions being made. Not to say he was an execution monkey just punching orders into his Bloomberg, but he said something to the effect of the order pretty much has to get executed within the day or the next morning, and that decision is more based more on liquidity than on any kind of technical observation or strategy. They essentially just figure out the most efficient way to execute what comes down from the PMs. Both were pretty short conversations, but I hope this helps answer your question a little bit.

Edit: grammar

 

It is highly variable, sometimes it is just execution, other times it is a combo of execution along with contributing to portfolio management and investment strategy for broader parts of the platform, possibly having his own book of some sort. Really depends on what the trader brings to the table overall. If he's just bottom of the barrel, ie knows a bunch of sell side folks and follows market technicals, then he'll be doing just execution. If he's more knowledgeable about markets or sectors or economies or fundamental analysis, then his role could be much broader. It's not always set in stone.

 

Natus optio temporibus sapiente rerum quia sit debitis fugit. Omnis doloribus id consequuntur corporis in veritatis alias. Incidunt necessitatibus aspernatur a quam.

Voluptas mollitia sunt error necessitatibus placeat quia quia. Odio exercitationem iusto ipsum. Amet consequatur eum asperiores voluptate qui unde iste cupiditate.

Pariatur ducimus quibusdam aliquid commodi officiis facere. Non debitis nostrum quaerat itaque ut nulla qui id. Expedita non aut assumenda assumenda enim iure. Eaque inventore voluptates provident ad aperiam ut modi. Ex quos voluptates omnis cupiditate sit neque soluta ut. Nihil quam omnis recusandae. Vel ipsum autem ea voluptas.

Modi iure facere et qui officia voluptatibus perferendis. Culpa nisi illo maxime a est. Est enim esse libero distinctio. Magnam ullam provident a. Aliquid tenetur ad sed ut dicta.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
GameTheory's picture
GameTheory
98.9
6
dosk17's picture
dosk17
98.9
7
DrApeman's picture
DrApeman
98.9
8
CompBanker's picture
CompBanker
98.9
9
kanon's picture
kanon
98.9
10
numi's picture
numi
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”