Portfolio Management: Portfolio managers guide institutional as well as private clients how they should allocate money into different asset classes. It’s a complicated area and requires sound understanding of portfolio theories, quantitative techniques and risk minimizing techniques. They should also possess good interpersonal skills as they directly consult human beings. There may be 2 variations in this kind of a role:
• Wealth Management: Finance professionals involved in advisory of financial instruments to clients after establishing their holistic financial plans. They may carry responsibility to earn fee for their employer in return of high portfolio advice being given. The ostentatious profile includes diverse exposure to businesses and individuals and leads to quick development of social intellect for the professional.
• Fund Management: These are the professionals who manage money under a particular scheme. They directly invest in markets on behalf of investors and try to generate high risk adjusted returns for them.
Equity Research Analyst: They are think tanks of capital markets. Their task is to analyze future prospects of businesses on the basis of financial & economic factors. They hunt for undervalued stocks where share prices are lower than true economic worth of the company. They generally have specialization in a particular sector of economy and track all news and policy changes related to it. They need to have sound understanding of various valuation models, financial statement analysis and above all the analytical skills. Successful research analysts can see through thick layers of businesses, quantify their thoughts and take a decision that is different and accurate at the same time. Research analysts publish their thoughts through research reports in media or to specific group of investors.
Credit Research Analyst: Phases of financial meltdown in history has proved the importance of credit analysis function in financial institutions and rating agencies. Credit analysts perform tasks similar to that of an equity research analyst except that the end decision is to invest in the debt of a company. They try to ascertain credibility and capacity of the borrower in paying back interest and principal to lenders where borrowers can be Countries as well as Companies. They are interested in knowing strength of business, its financials, management quality etc.
Investment Banking: Investment Banks render high end financial services to corporate clients, such as Mergers & Acquisition, Fund Raising, IPO valuation, Debt Syndication etc. It’s a multifaceted business where deeply talented professionals get an entry ahead of competition. Investment bankers may be involved in following activities:
• Investment Banking Research: Analysts in this part of IB try to address how a merger of different companies would fetch synergies for companies involved. They look at financial, strategic and economic benefits of the deal
• Deal Scouting: Professionals in this part of IB are also known as front-enders since they interact & network with top management of companies and explore investment banking needs.
• Debt Syndication: Debt syndicators get requisite financing for big projects. Their task is similar to those who are in deal scouting. Both need to have strong interpersonal and technical skills.
Private Equity: Analysts in this area deal with the difficult side of IB, valuation of companies that are privately held. The challenging task requires knowledge of higher end techniques of valuation and deeper knowledge of business models.
Derivatives Strategy: Derivatives are the greatest and most debated innovation in financial markets in recent decades. Derivatives hold a prominent position in areas of trading, business risk management and portfolio management. Complex financial derivatives exist in almost all areas ranging from stock, debt, interest rates, commodities and currency to even monsoon and cyclones. Derivate specialists design optimum trading or risk management strategies and it requires deep knowledge about their valuation and features.
Trading: Traders buy and sell but efficient traders buy cheap and sell expensive. It’s a burgeoning area of employment for finance professionals. Companies having proprietary trading desk employ skilled workers who invest on company’s behalf in stocks, bonds, commodities, currencies or derivatives to earn profits. Many of the traders are just automated traders, who simply design trading strategies on the basis of their view on market, execution is done automatically by high end softwares.
Technical Analysis: Technical analysts are experts who taking the buy or sell decision in the basis of past movement in prices of any stock, bond, currency or commodity. They study the graphs, volumes and momentum indicators of an asset to arrive at a buy/sell decision. Most important skills include data interpretation, number crunching and statistical understanding.
Other: Scope of this program is vast and above mentioned profiles may be just a drop in ocean. There is possibility of employment in other areas as well, such as: Real Estate Analysis, Hedge Funds, Risk Management, Arbitrage, Currency and Commodity analysis, Quantitative Analysis, Automated Trading, and Academics etc.